Mondelēz International Inc., the snacks and sweets company, is exploring an acquisition of iconic U.S. chocolate maker Hershey Co., in a potential deal that would create a food giant with combined sales of almost $50 billion, according to people familiar with the matter.

Chicago-based Mondelēz has made a preliminary approach about a possible combination, said the people, who asked not to be identified because discussions are private. 

Shares in Hershey Co. rose as much as 19% on Monday for their biggest intraday gain in more than eight years after the Bloomberg News report. The stock was trading up 12% at 10:57 a.m. in New York, giving the company a market value of $40 billion. Mondelēz fell 2%, giving it a market capitalization of roughly $83 billion. 

It’s not the first time Mondelēz has sought a deal for Hershey Co. In 2016, it walked away from discussions about a potential takeover after seeing a $23 billion bid rejected by the chocolate maker.

Hershey Co. has a value of roughly $45 billion including debt, Bloomberg-compiled data show. That means a takeover of the Hershey, Pennsylvania-based company would top the value of the year’s biggest deal—snack maker Mars Inc.’s agreement to buy Kellanova for nearly $36 billion including debt in August.

Any deal would require the backing of Hershey Trust Co., which owns almost all of Hershey Co.’s Class B stock, giving it roughly 80% of the voting power at the company. The trust has slowly been selling some of its Hershey Co. shares in an effort to diversify its holdings. If Hershey Trust were supportive of a takeover, Hershey Co. could attract interest from other suitors, the people said.

Deliberations are in the early stages and there’s no certainty that discussions will lead to a deal, the people said. A representative for Hershey Co. said the company doesn’t comment on market rumors. A spokesperson for Hershey Trust couldn’t immediately be reached for comment. A representative for Mondelēz didn’t respond to multiple requests for comment.

The packaged food industry has been grappling with declining volumes, slowing growth and a weakening global consumer. Companies are looking to innovation and new markets to bolster sales as shoppers start to push back on price hikes and become more health-conscious—a trend that could lead to consolidation. 

Mondelēz makes Ritz crackers and Oreo cookies as well as Toblerone chocolate bars. The company is “receptive to acquisitions” and has the debt capacity for M&A as it looks to expand its chocolate, biscuits and baked snacks divisions, analysts at Bloomberg Intelligence wrote in September. The company in October reported third-quarter earnings that beat estimates.

Founded in the late 19th century, Hershey Co. is known for its chocolate and candy brands including Hershey’s Kisses, Reese’s Peanut Butter Cups and PayDay. It expanded its sweets portfolio in November with an acquisition of Sour Strips.

The company, led by CEO Michele Buck, has been hit by record high cocoa prices, which have come down from their peaks but remain significantly elevated compared with prior years. Sugar costs are also high. Last month, Hershey Co. cut its outlook for net sales growth and earnings, as inflation-weary consumers watch their budgets.

—Bloomberg News