Kellogg Company has signed a definitive agreement to divest certain businesses to Nutella maker Ferrero for $1.3bn.

       Businesses that are part of the deal include cookies, fruit and fruit-flavoured snacks, pie crusts and ice cream cones, as well as brands and assets associated with these businesses.

       Brands that are part of this deal include Keebler, Mother’s, Famous Amos, Murray’s and Murray’s Sugar-Free, as well as cookies manufactured for the US Girl Scouts.

       The company will retain the rest of its North America snacking businesses, which include crackers, salty snacks, wholesome snacks and toaster pastries brands.

       Kellogg Company intends to use cash proceeds to reduce outstanding debt.

       Kellogg’s chairman and CEO Steve Cahillane said: “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.

       “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.”

       The transaction also includes production facilities at Augusta in Georgia, Florence and Louisville in Kentucky, Allyn in Washington, and Chicago in Illinois.

       Completion of the deal is subject to customary closing conditions, including regulatory approvals. The deal is expected to close by the end of July.

       Last year, these businesses posted net sales of almost $900m and operating profit of around $75m.

       For this transaction, Evercore served as the lead advisor to Kellogg, while Goldman Sachs acted as co-advisor. Wachtell, Lipton, and Rosen & Katz acted as legal counsel.