Ferrero and Hostess (TWNK, $12.04) posture for Kellogg’s (K, $56.73) Keebler business

Hostess Brands and Nutella-owner Ferrero are competing to buy Kellogg's Keebler, Famous Amos and fruit snacks businesses, in a deal that could value the brands at roughly $1.5 billion.

In a recent shakeup across the food industry, big food companies are increasingly shedding smaller brands, as they intensify focus on the profit-makers. Taking advantage of such situations, companies like Hostess and Ferrero are placing a bet on these smaller brands as they believe the right strategy can successfully revive these already established brands.

According to sources familiar with the deal, both Hostess and Ferrero have put in their final offers to Kellogg for the cookie and fruit snacks brands. Even though other buyers are still in the reckoning, these two are viewed as front-runners, although any deal is still likely more than a week away.

Kellogg had acquired Keebler in 2001 for nearly $4.4 billion.