Private equity firm Cerberus Capital Management, which owns a stake in grocer Albertsons , and billionaire investor Dean Metropoulos teamed up in an unsuccessful bid for cereal maker WK Kellogg , according to three sources familiar with the matter.

WK Kellogg, the Battle Creek-based maker of cereals, agreed to the sale as the company has struggled with weakening consumer demand due to inflation.

The transaction marks the end of Battle Creek's run as a quintessential company town in Michigan, where the name "Kellogg" graces almost everything.

WK Kellogg shares rose by more than 50% in after-hours trading in New York after the reports. WK Kellogg and Ferrero did not immediately respond to BBC requests for comment. Kellogg has been struggling financially in recent years despite a major shakeup in 2023 that saw it focus solely on breakfast cereals.

The Italian maker of Ferrero Rocher and Nutella has set its sights on WK Kellogg as the U.S. cereal maker struggles to get traction.

Officials are welcoming an Italian sweets company to town as it finalizes a mega deal to buy an iconic Michigan company that helped redefine breakfast. Ferrero Group — the makers of Ferrero Rocher, Nutella and a slew of other tasty treats — is set to buy Battle Creek-based WK Kellogg Co,