CHICAGO — Snacks and confections giant Mondelez International reportedly is eyeing a potential acquisition of chocolate and snacks maker The Hershey Co.

Citing unnamed sources, Bloomberg reported Dec. 9 that Chicago-based Mondelez has “made a preliminary approach about a possible combination.” No further details on a possible transaction were reported, as Bloomberg noted that “deliberations are in the early stages, and there’s no certainty that discussions will lead to a deal.” A combination of the two companies “would create a food giant with combined sales of almost $50 billion,” Bloomberg said.

Hershey couldn’t immediately be reached for comment while a spokesperson for Mondelez said the company’s policy is to not comment on “market rumors and speculation.”

News of a potential deal sent Hershey’s stock soaring. The Hershey, Pa.-based company’s share price opened Dec. 9 at $174.05 and rose 11% to close at $193.65. Meanwhile, Mondelez’s stock price opened the day at $62.79 and closed down 2% at $61.44.

Mondelez has previously approached Hershey about a possible acquisition, most recently in June 2016, when Hershey confirmed that it had received a “preliminary, non-binding indication of interest” from Mondelez to be acquired for $107 a share.

“An unsubstantiated Bloomberg article reports that Mondelez is contemplating a bid for Hershey,” TD Cowen analyst Robert Moskow said in a Dec. 9 research note. “This is the third time we have seen The Hershey Co. become a target for acquisition in the past 22 years. In the past, The Hershey Trust has always elected to maintain control. But today, the company is in a more vulnerable position, which we think could lead to a change of heart.”

The controlling Hershey Trust is now facing a number of headwinds and other concerns, Moskow said.

“Lack of diversity in The Hershey Trust’s holdings has always been a problematic element of its fiduciary duty to ensure the financial support of The Hershey School into perpetuity,” he said. “The company now faces long-term headwinds from the expansion of GLP-1 drugs and heightened scrutiny on unhealthy food in the US. The company is also facing cyclical challenges from rising cocoa costs, corporate layoffs and market share losses. The combination of these factors certainly must give them pause. The Hershey Trust controls 79% of the vote and 28% of the economics.”

An acquisition of Hershey would carry a hefty price tag for Mondelez. Moskow reckoned that Mondelez would have to pay a 38% equity premium to buy Hershey, resulting in a price of $242 per share, cost synergies of 7% of sales and financing of 50% debt and 50% equity.

Still, Moskow noted, acquiring Hershey would “create opportunities and address many issues for Mondelez all at once.” He cited the addition of “two world-class brands to its snack portfolio,” pointing to Hershey and Reese’s.

“They have the distribution muscle and scale that Hershey lacked to expand Hershey and Reese’s internationally,” he said in his research note.

In addition, a combination would provide the scale and cost synergies to handle escalating cocoa costs, “which neither Hershey nor Mondelez can fully offset with higher pricing,” Moskow said.

Mondelez and Hershey also are facing heightened competitive pressure after Mars Inc. in August unveiled a $39.5 billion deal to acquire Kellanova, reflecting Mars’ goal to double the size of its snack business in the next decade. Kellanova shareholders approved the agreement, which would take publicly held Kellanova private into family-owned Mars, in early November. Regulatory approvals and other customary closing conditions are pending, and Mars said it expects the transaction to close in the first half of 2025.

“Mars’ acquisition of Kellanova could make Mars a more formidable competitor over time,” Moskow said in his report. “The acquisition came as a surprise, because most in the industry expected Mars to expand into pet and meals, not snacks.”