Mondelez International Inc has made a $23 billion takeover offer for Hershey Co, looking to create the world's largest confectioner, a person familiar with the matter has said.
A merger of two of the world's top five confectionary makers would bring Hershey's strong US business to Mondelez's global footprint.
The combined company would leapfrog Mars Inc, which has 13.3% of the global market, according to data firm Euromonitor International Ltd.
The bid also pits Mondelez against the Hershey Trust, one of Pennsylvania's wealthiest charities.
The trust has about 80% of Hershey's voting rights and in 2002 prevented the Hershey, Pennsylvania-based company from being acquired by Wm Wrigley Jr Co for $12 billion.
Mondelez has offered $107 per share, half in stock and half in cash, the source said. Hershey shares jumped 15.1% to $111.86, while Mondelez rose 2.3%to $43.97.
Tigress Financial Partners LLC analyst Philip Van Deusen said he expected the offer price to increase, given the rise in Hershey shares.
"I think ($107) is a good starting place," he said.
Hershey received Mondelez's preliminary offer this week and has yet to respond, the source said. Mondelez plans to keep the Hershey name and preserve jobs as well as help the company expand internationally, the person added.
Mondelez and Hershey declined to comment.
The Wall Street Journal first reported the offer. The source request anonymity because the bid is not public.
Analysts have been sceptical of takeover bids for Hershey in the past.
"The Trust ... is outwardly very committed to keeping the company independent," Bernstein analyst Alexia Howard had said in June last year.
"So it's pretty much impossible for an activist to get involved or for the company to be bought."
