Kellogg (NYSE:K) is nearing a deal to sell its Keebler, Famous Amos and fruit snacks businesses to Nutella-owner Ferrero for between $1 billion and $1.5 billion, according to early media reports.
An announcement could come as soon as Monday, the people said, requesting anonymity because the information is confidential.
Ferrero beat out lead contender Hostess Brands for the Kellogg cookie assets, media sources said. The owner of Twinkies and Ho-Hos had been looking to acquire the Keebler business through a "Reverse Morris Trust."
The Reverse Morris Trust or RMT is an unusual deal structure that allows for a tax-efficient combination of two similarly-sized companies.
Kellogg announced the sale of its cookie brands last year, along with Murray and Mother's cookies and Stretch Island fruit snacks.
The deal is the latest in a string of acquisitions for Ferrero. The company, founded in Italy as a family business in 1946, first entered the U.S. market in 1969 with its Tic Tac mints.
Over the past two years, its built up that foothold, buying Ferrara Candy Company for $1 billion and Nestle's U.S. candy business for $2.8 billion. Its array of brands now include Butterfinger, SweeTARTS, and Crunch.
Kellogg, meantime, is paring back its portfolio to focus on brands it can revive, like Pringles, Cheez-Its, and Rice Krispies Treats. Shares of Kellogg, which has a market capitalization of $19.72 billion, are down nearly 11% over the past year.
Those shares began Monday, the week, the month and the quarter down 44 cents to $56.94
