Shares of Hershey Company (NYSE:HSY, ETR:HSY) jumped nearly 19% on Monday following a report that Cadbury-maker Mondelez International is exploring a potential acquisition of the chocolate giant that, if successful, would create one of the world’s largest confectionery companies.
Bloomberg News, citing people familiar with the matter, reported that Mondelez has made a preliminary approach about a possible combination.
The talks are reportedly in early stages, with no certainty that they will lead to a deal.
Mondelez International Inc (NASDAQ:MDLZ, ETR:KTF) shares were down 4% on the news.
The company has sought to acquire Hershey in the past. In 2016, Mondelez abandoned a $23 billion takeover bid after Hershey rejected the offer. At the time, Reuters reported that Hershey was unwilling to entertain bids below $125 per share.
Hershey recently lowered its annual revenue and profit forecasts after posting quarterly revenue of nearly $3 billion, reflecting weaker demand.
In contrast, Mondelez reported a 2% rise in sales to $9.2 billion in its latest quarter, bolstered by its global portfolio of brands like Oreo and Milka.
The slowing growth across the sector, following years of price hikes, has created an environment ripe for mergers and acquisitions. Earlier this year, Mars announced a $36 billion deal to acquire Kellanova (NYSE:K), combining brands such as Snickers and Pringles in one of the year’s biggest deals.