On December 9th, Bloomberg reported that Mondelez International is exploring the possibility of acquiring Hershey Company. According to a source close to the matter, the discussions are still in the preliminary stages and it is unclear whether the negotiations will lead to a deal between the two companies.

If the merger goes through, the combined entity would become one of the largest candy and snack companies globally. Mondelez owns popular brands such as Oreo, Cadbury, Chips Ahoy, Ritz Crackers, Wheat Thins, and Sour Patch Kids. Meanwhile, Hershey is renowned for its Hershey's chocolate, KitKats, Reese's, Jolly Rancher, and SkinnyPop Popcorn products. The news caused Hershey's stock to surge as much as 19% before closing 10.8% higher yesterday, valuing the company at $39 billion. In contrast, Mondelez's shares fell 2%, reducing its market capitalization to $82 billion.

Both Mondelez and Hershey have declined to comment on the information.

This is not the first time Mondelez has shown interest in acquiring Hershey. In 2016, Hershey rejected Mondelez's $23 billion takeover offer. The Hershey Trust, which owns a majority of the voting rights in the company, has been hesitant about selling this iconic brand.

Analysts suggest that Mondelez's interest in Hershey is driven by the opportunity to strengthen its position in the increasingly expensive cocoa market, as well as the potential to generate additional revenue in the US and European markets.

Recently, global consumers have become more health-conscious, leading to a decline in demand for unhealthy snacks. This trend, coupled with rising inflation, has prompted several large-scale mergers in the industry, such as Mars' (UK) $30 billion acquisition of Kellanova (US) in August.