Ferrero International SA, a closely held Italian candy maker, is close to acquiring cereal producer WK Kellogg Co. for about $3 billion, according to people with knowledge of the matter.
Talks are advanced and a deal could be announced this week, the people said, asking not to be identified discussing private information.
Shares of Kellogg surged as much as 54% in post-market trading after the Wall Street Journal reported earlier on Wednesday that the two companies are nearing a deal. The stock had declined 2.7% this year through Wednesday’s close, valuing the company at $1.51 billion.
A takeover of Kellogg has been speculated for several months. Dealreporter wrote in February that Ferrero was weighing a bid and the Betaville blog said earlier this week that Kellogg may have received takeover interest.
Representatives for Ferrero and Kellogg didn’t immediately respond to requests for comment.
Ferrero has selectively bought brands, including from Kellogg before the separation, to bulk up its lineup of products.
