US food group Kellogg has agreed to sell its Keebler biscuits brand and other assets to Nutella maker Ferrero for $1.3 billion as it focuses on its core cereals and snacks businesses.
The deal comes as packaged food companies struggle to adjust to changing consumer tastes and rising demand for low-sugar, healthier items.
Kellogg's fruit-flavored snacks, pie crusts and ice-cream cones businesses will also pass to the Italian confectioner as part of the deal.
The deal is Ferrero's fourth acquisition in the US since 2017 as it looks to expand in a key market for chocolate and biscuits, an area where it is growing rapidly.
Giovanni Ferrero, executive chairman of the Ferrero Group, said in a statement that the Kellogg businesses were an excellent strategic fit for the family-owned group.
Next month Ferrero is expected to launch a new Nutella-filled biscuit in France, further expanding the reach of its chocolate and hazelnut spread, which was launched in 1964 by Giovanni's father Michele Ferrero.
Analysts said the deal would boost the Italian company's negotiating power with big US retail chains.
The businesses being sold by Kellogg had net sales of nearly $900m in 2018, the US food group said.
It said the deal, which is expected to close by the end of July, will reduce 2019 adjusted earnings per share by less than 5%.
Ferrero is on an aggressive acquisition campaign under the leadership of Giovanni Ferrero, who took over the company following his father's death in 2015.
The group, best known for its Ferrero Rocher chocolate and Tic Tac mints, has been buying neglected brands from big food companies, aiming to revive them through investment and innovation.
Last year it bought Nestle's US confectionary business, having acquired Ferrara Candy and Fannie May chocolate group in 2017.
As a result of those deals, Ferrero's revenue reached $12 billion in the fiscal year ended in August 2018.