Shares in US chocolate maker Hershey rose more than 10 percent after reports that Mondelez International, which owns UK-based Cadbury, had approached the firm about a possible purchase.
A deal could create a snack food giant with combined sales of around $50bn (£39.2bn) a year.
Both Mondelez and Hershey declined to comment on the report when contacted by BBC News.
In 2016, Hershey rejected a $23 billion takeover offer from Mondelez..
According to Bloomberg, the approach is still in the early stages and it is not certain that the talks will lead to an agreement.
Any deal would require the approval of the Hershey Trust Company, a charitable trust, which retains voting control of the business.
The merger of the two companies will bring the world famous confectionery and snack foods under one roof.
Hershey is known for brands including Hershey’s Kisses and Reese’s Peanut Butter Cups.
Along with ownership of Cadbury, which it bought in 2010, Mondelez brands include Ritz crackers, Oreo biscuits and Toblerone chocolate.