Hostess Discredits, B&G Foods and Nutella-owner Ferrero have placed first-round bids on Kellogg’s Keebler, Famous Amos and fruit bites businesses, in a deal that could value the brands at more than $1.5 billion, people familiar with the setting tell CNBC.
Kellogg announced the sale of its cookie brands last year. Other brands up for sale incorporate Murray and Mother’s cookies and Stretch Island fruit snacks.
Private equity firms are also competing for the cookie marks, the people said.
The sale comes as Kellogg competitor, Campbell Soup, is selling its own cookie brands, Australia-based Arnott’s. The soup assemblage’s cookie business has also attracted Ferrero, as well as Mondelez and Kraft Heinz, CNBC first reported. The enterprise’s Australian heritage has lent itself to a buyer base with an international focus.
Campbell and Kellogg are among the uncountable Big Food brands that are paring down their portfolios to be more nimble as they struggle to kick-start excrescence. Other examples include Kraft Heinz, which last year announced the sale of its Indian food calling, Complan and General Mills, which has said it plans divestitures.
Those sales have created opportunity for trains like Ferrero, Hostess and B&G that have looked to deals to broaden their reach.
Italy-based Ferrero, which was established 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 exact ones pound of flesh from roughly $1 billion to buy Ferrara Candy Company, the U.S. owner of Red Hots and Now & Later candies, giving it infrastructure and a party line 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 studying deals to broaden its treats beyond Twinkies and Ho-Hos. Executive Chairman Dean Metropoulos told analysts hold out 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 up to date year bought breakfast brands the Big Texas and Cloverhill from Aryzta.
B&G, meantime, has bought a number of discarded varieties from the country’s largest food companies, looking to revive neglected brands with new investment. The owner of Cream of Wheat purchase Green Giant from General Mills for $765 million in 2015 and McCann’s Irish oatmeal from TreeHouse Breads for $32 million last year.
A spokesperson for Kellogg said it is “exploring the potential divestiture of our cookies, fruit nibbles, ice-cream cones, and pie shells businesses. A formal process is underway.”
B&G and Ferrero declined to comment. Hostess did not respond to insist ons for comment. The people requested anonymity because the talks are confidential.