Italian chocolatier Ferrero is reported to be in talks with friendly investors over forming an alliance with UK confectioner Cadbury, according to ItalyÔÇÖs Il Sole 24 Ore newspaper.
According to the paper, Ferrero, which makes Nutella and Ferrero Rocher chocolates, is said to be in talks with investors and private equity firms over a possible alliance with the UK firm.
Cadbury has been the subject of a hostile bid from US food manufacturer Kraft, whose brands include Kenco and Maxwell House coffee, Oreo biscuits, Jacobs and Toblerone.
Last week, Kraft took its $16.3 billion cash and shares offer for Cadbury to the UK company's shareholders, refusing to sweeten its original price.
Cadbury rejected the offer, with chairman Roger Carr saying it ÔÇ£does not come remotely close to reflecting the true value of our company.ÔÇØ
It is unlikely that Ferrero would be able to bid on its own for Cadbury but one theory is that the Italian firm could team up with another party, such as Hershey or Nestl├®, to mount a joint offer.
An alliance with Ferrero would help Cadbury to fend off KraftÔÇÖs hostile takeover bid.
Ferrero, which has 14 factories and over 21,600 employees worldwide, had sales of Ôé¼6.2 billion last year.
Cadbury is the world's second largest confectionery company after Mars-Wrigley, with its brands including Dairy Milk, Green & BlackÔÇÖs, Trident gum and Halls Soothers.
Cadbury had full-year revenues of £5.4 billion in 2008.
Ferrero was founded in 1946 by Pietro Ferrero, who launched the hazelnut-based Gianduja product, which later became Nutella.
FerreroÔÇÖs son Michele took control of the firm in 1957 and the company is now run by his sons, Pietro and Giovanni, who are joint chief executives.
It is reported that the two brothers would be keen to merge with Cadbury, seeing it as a good opportunity for Ferrero.
Neither Cadbury nor Ferrero have yet commented on the reports.
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