Kellogg (NYSE: K), the snack giant announced on Monday that it plans to get out of the cookie business in order to better focus on snacks and cereal. Its iconic cookies assets, which include Keebler, Famous Amos, Mother’s, Murray’s and cookies manufactured for Girl Scouts of the USA as well as its fruit brands will be sold to Nutella-owner Ferrero for USD 1.3 Billion.
The cereal maker has been exploring a sale of its cookie and fruit snack businesses since November so it can focus on “core” parts of the company, which include its salty and wholesome snacking portfolio.
The company reportedly had trouble in allocating necessary resources to the assets to compete in the increasingly crowded cookie and sweet market. “Divesting these great brands wasn’t an easy decision,” said Steve Cahillane, Kellogg’s CEO, in a statement. “This divestiture is yet another action we have taken to reshape and focus our portfolio, which will lead to reduced complexity, more targeted investment, and better growth.”
Ferrero was founded in Italy in 1946 as a family business. It entered the U.S. market in 1969 with its Tic Tac mints. The acquisition of Kellogg’s cookie brands will help the company to expand its business in North America, along with the purchase of Nestle’s (Swiss Exchange: NESN-CH) candy business.
“We are acquiring a portfolio of well-established brands that consumers love, with very strong market positions across their respective categories, allowing us to significantly diversify our portfolio and capitalize on exciting new growth opportunities in the world’s largest cookies market,” Ferrero Group CEO Lapo Civiletti said in a statement.