UK confectioner Cadbury has rejected a £10.2 billion takeover bid from Kraft Foods, the US food group behind the Milka and Toblerone brands.

Kraft announced its offer for Cadbury today and said the deal would create“a global powerhouse in snacks, confectionery and quick meals with a rich portfolio of iconic brands.

The transaction – worth 300p in cash and 0.2589 in new Kraft shares per Cadbury share – would create a company generating £50bn in sales.

Kraft says the Cadbury board had rejected the offer despite the bid representing a 31 per cent premium on Cadbury’s Friday share price, but is still hopeful it can clinch a deal.