Mondelez is reportedly considering an offer to buy rival Hershey, which would create one of the world’s largest food companies.
Mondelez made a preliminary approach after Hershey reported its third-quarter earnings last month, according to Bloomberg.
Hershey’s earnings that quarter missed expectations. "While our categories remain relevant to consumers, our performance this quarter was impacted by both industry-wide and Hershey-specific challenges,” said CEO Michele Buck at the time.
The company has been impacted by greater competition, promotion issues, and a fall in consumers’ trips to convenience stores, Buck said.
The chocolate sector has also been affected by rising cocoa prices this year.
Mondelez’s brands include Oreo, Cadbury, and Ritz Crackers, while Hershey owns chocolate lines like KitKat and Reese’s.
Mondelez bid US$23 billion for Hershey’s in 2016, though Hershey’s rejected the offer.
Hershey’s (NYSE: HSY) share price closed at US$193.65, surging after the news of a potential acquisition broke. Its previous close was $174.70. Hershey’s market cap is US$39.19 billion.
Mondelez’s (NASDAQ: MDLZ) share price closed at US$61.44, down from its previous close of $62.86. Its market cap is US$82.16 billion.