Hostess Brands, B&G Foods and Nutella-owner Ferrero have placed first-round bids on Kellogg’s Keebler, Famous Amos and fruit snacks businesses, in a deal that could value the brands at more than $1.5 billion, people familiar with the situation tell CNBC.
Kellogg announced the sale of its cookie brands last year. Other brands up for sale include Murray and Mother’s cookies and Stretch Island fruit snacks.
Private equity firms are also competing for the cookie brands, the people said.
The sale comes as Kellogg competitor, Campbell Soup, is selling its own cookie brands, Australia-based Arnott’s. The soup company’s cookie business has also attracted Ferrero, as well as Mondelez and Kraft Heinz, CNBC first reported. The company’s Australian heritage has lent itself to a buyer base with an international focus.
Campbell and Kellogg are among the many Big Food brands that are paring down their portfolios to be more nimble as they struggle to kick-start growth. Other examples include Kraft Heinz, which last year announced the sale of its Indian food business, Complan and General Mills, which has said it plans divestitures.
Those sales have created opportunity for companies like Ferrero, Hostess and B&G that have looked to deals to broaden their reach.
Italy-based Ferrero, which was founded as a family business in 1946, has been aggressive in using acquisitions to grow its global footprint over the past two years. In 2017, it paid roughly $1 billion to buy Ferrara Candy Company, the U.S. owner of Red Hots and Now & Later candies, giving it infrastructure and a platform to grow in the U.S. It later bought Nestle’s U.S. candy business for $2.8 billion, adding to its portfolio brands like BabyRuth and Butterfinger.
Hostess has been eyeing deals to broaden its treats beyond Twinkies and Ho-Hos. Executive Chairman Dean Metropoulos told analysts last February the company has “looked at every snack acquisition that has been announced [that] year,” but was put off by the sky-high valuations. The Twinkie-owner last year bought breakfast brands the Big Texas and Cloverhill from Aryzta.
B&G, meantime, has bought a number of discarded brands from the country’s largest food companies, looking to revive neglected brands with new investment. The owner of Cream of Wheat bought Green Giant from General Mills for $765 million in 2015 and McCann’s Irish oatmeal from TreeHouse Foods for $32 million last year.
A spokesperson for Kellogg said it is “exploring the potential divestiture of our cookies, fruit snacks, ice-cream cones, and pie shells businesses. A formal process is underway.”
B&G and Ferrero declined to comment. Hostess did not respond to requests for comment. The people requested anonymity because the talks are confidential.
By Lauren Hirsch
Carlsberg has announced the departure of its chief financial officer (CFO), Heine Dalsgaard, after six years in the position. In a statement, Carlsberg said that Dalsgaard was resigning from the post to take up the role of CFO at a private equity-backed company in a different industry.
Kellogg will split into three independent companies to focus on the snack business, Reuters reported Tuesday. The snacking portfolio will comprise the main business, while the North America cereal unit and the plant-based business will be spun off. The company is also considering a sale of the plant-based business.
The snacks giant says the acquisition will help build on its commitment to “lead the future of snacking” in key geographies worldwide. Once the transaction is completed, Mondelēz will continue to operate the Clif Bar business from its headquarters in Emeryville, California. The snack giant will also continue to manufacture Clif Bars’ products, which include Clif Bar, Luna and Clif Kid, at its facilities in Idaho and Indiana.