The Italian candy company Ferrero plans to buy the American cereal maker Kellogg for $3.1 billion, the companies announced Thursday.

Italian confectioner Ferrero, known for brands like Nutella and Kinder, is buying the century-old U.S. cereal company WK Kellogg in an effort to expand its North American sales.

U.S. sales of the colorfully packaged morning staple have been in a decades-long decline, a trend back in the spotlight with news that Italian confectioner Ferrero Group plans to purchase the American...