Talks are advanced and a deal could be announced this week, the people said, asking not to be identified discussing private information.

A takeover would combine the maker of chocolate nut spread Nutella with the company behind Froot Loops and Frosted Flakes cereals and further cement Ferrero’s moves to carve out an empire of comfort foods and expand its presence in North America.

Controlled by the low-profile billionaire Giovanni Ferrero, the confectionery company has been on an acquisition spree in recent years targeting brands often in the cross-hairs of health regulators and changing consumer trends.

Ferrero has bought Fannie May chocolates, which boosted its manufacturing capabilities and presence in the premium chocolate market in the US. It also snapped up rival Nestle SA’s US confectionery arm, gaining well-known brands like Butterfinger and Baby Ruth.

The latest move by Ferrero, which reported a near 9% jump in sales to €18.4 billion last year, sounds “credible” given the company’s multi-year strategy to expand its US presence, according to Robert Moskow, an analyst at TD Cowen.

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, building on previous speculation of takeover interest. The stock had declined 2.7% this year through Wednesday’s close, valuing the company at $1.51 billion.

Representatives for Ferrero and Kellogg didn’t immediately respond to requests for comment.

A takeover could boost a business that’s been struggling to grow since Kellogg Co. was split in two, with the snacking business rebranded Kellanova and the cereal brands under WK Kellogg. In May, Kellogg cut its annual sales guidance with Chief Executive Officer Gary Pilnick calling out a “challenging operating environment,” as consumers move away from sugary foods and gravitate toward cheaper private-label cereal options.

Kellanova, the owner of Pringles and Cheez-It, has already been sold on to another family-owned company Mars Inc. for nearly $36 billion including debt, the largest deal of the year, Bloomberg’s data showed.