Kellogg's offloads Keebler and Famous Amos brands to Ferrero

Food manufacturer Kellogg's revealed on Monday that it will be selling its Keebler, Famous Amos and fruit snacks businesses to Nutella-maker Ferrero for a total of $1.3bn.

Ferrero came in ahead of Hostess Brands in the bidding war to acquire Keebler through something known as a "Reverse Morris Trust," an unorthodox deal that allows a tax-efficient combination of two companies of a similar size.

The acquisition, set to be closed by the end of July, marks the latest in a series of deals by Ferrero, which has sought to build up its foothold in the US by buying the likes of Ferrara Candy for $1bn, as well as its takeover of Nestle's North American candy operations for $2.8bn.

Ferrero chief executive Lapo Civiletti said: "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."

The Italian firm will also acquire six US food manufacturing facilities and a leased manufacturing plant in Baltimore as part of the deal.

On the other side, Kellogg will now scale back and refocus its portfolio on brands it feels confident it can revive, such Pringles, Cheez-Its and Rice Krispies Treats.

"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," said Kellogg chief executive Steve Cahillane.

"Divesting these great brands wasn't an easy decision, but we are pleased that they are transitioning to an outstanding company with a portfolio in which they will receive the focus and resources to grow."

As of 1620 BST, Kellogg's shares dipped 1.71% to $56.40 each.