Shares of WK Kellogg soared more than 50% on Wednesday following a report that chocolate maker Ferrero is close to a roughly $3 billion deal to buy the cereal company.

The Italian company known for its circular hazelnut chocolates could finalize an acquisition of the legacy breakfast foods business as soon as this week, The Wall Street Journal reported, citing people familiar with the matter.

WK Kellogg, which makes U.S. childhood staples such as Froot Loops and Frosted Flakes, spun off into a standalone company in 2023. A separate publicly traded business, Kellanova, now houses snack brands such as Pringles and Cheez-It. M&M owner Mars agreed to buy Kellanova for $36 billion last year in a deal that has not yet closed.

WK Kellogg shares have fallen about 2% this year, and the company has a roughly $1.5 billion market cap.

A Ferrero acquisition of WK Kellogg would add to consolidation in packaged foods. Many American consumers have shunned sugary cereals in favor of breakfast options considered healthier, and other shoppers moved to private label brands after inflation spiked in recent years.

The move would deepen Ferrero’s ambitions in the U.S. market. The third-largest U.S. candy company in May announced a new slate of products to appeal to American consumers, including peanut Nutella and Dr Pepper Tic Tacs.