Shares in US chocolate maker Hershey have jumped by more than 10% after a report that Mondelez International, which owns UK-based Cadbury, has approached the firm about a potential buyout.

A deal could create a snack food giant with combined sales of almost $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 $23bn takeover offer from Mondelez.

According to Bloomberg, the approach is still in the preliminary stages and it is not certain that the talks will lead to a deal.

Any deal would need approval from the Hershey Trust Company, a charitable trust that maintains voting control over the business. It has previously blocked the firm from being acquired.

A merger of the two companies could bring together some of the world’s best-known candy and snacks under one roof.

Hershey is known for brands such as Hershey’s Kisses and Reese’s Peanut Butter Cups.

In addition to owning Cadbury, Mondelez’s brands include Ritz crackers, Oreo cookies and Toblerone chocolate.

The packaged food industry has faced slowing growth as consumers feel the impact of years of rising prices.

Chocolate companies in particular have had to pass on the costs of higher cocoa prices to their customers.

Last month, Hershey lowered its revenue and profit forecasts. Its chief financial officer, Steve Voskuil, said high cocoa prices will be the “biggest source of inflation” for the company going forward.

Another food giant, Kraft Heinz, also recently cut its annual sales and profit forecasts as customers cut back on purchases following several rounds of price hikes.

Some companies have sought deals to secure new markets and boost growth.

In August, confectionery giant Mars reached a deal to acquire Pringles and Pop-Tart maker Kellanova for nearly $36 billion.

Some analysts have forecast a surge in mergers during the incoming Trump administration as the president-elect is seen as more deal-friendly.