Cadbury owner Mondelez International Inc (NASDAQ:MDLZ, ETR:KTF) has renewed its interest in Hershey Company (NYSE:HSY, ETR:HSY) amid a flurry of reports suggesting the pair have begun talks to create a chocolate and snacks giant with $50 billion in annual revenues.
Stock in the US candy maker shot up 10% after-hours as news of a potential deal began permeating.
No terms have so far been mooted, and any agreement would require approval from the Hershey Trust Company.
It holds the controlling votes and has previously blocked takeovers, including a $23 billion offer from Mondelez in 2016.
Insiders quoted by US media outlets say the talks are at an early stage, suggesting an offer, should it materialise, is unlikely this side of Christmas.
Most probably the factor that has drawn Hershey to the table is the tough backdrop for the industry, which has been hit by slowing growth and rampant inflation, specifically soaring cocoa costs.
Certainly, Hershey has not been immune to the pressures, as it has been forced to lower its earnings forecasts.
The merger of the two giants would give us a chocolate cupboard full of household names such as Hershey’s Kisses and Reese’s, Cadbury, Oreo, and Toblerone.