Swiss food giant Nestlé is understood to be eyeing US confectioner Hershey, just days after rival Kraft Foods landed a deal for Cadbury.
Nestlé is hoping that market pressures will wear down opposition from the Hershey Trust, the charity that controls 80% of voting shares in Hershey, Reuters reported.
Analysts believe a deal would make sense because Hershey is more exposed to commodity costs than its rivals because it only makes confectionery.
"We believe a deal for Hershey could be secured at around $10-11bn plus a $2bn debt take-out," analyst Deborah Aitken at brokers Bryan Garnier said.
Hershey rules out late Cadbury bid (22 January 2010)
Cadbury surrenders to new Kraft bid (19 January 2010)