Confectionary conglomerate Mondelez International has decided to abandon its bid to take over American confectioner Hershey after having a $23bn (€20.5bn) offer rejected.

The deal would have created the world's largest confectionary company.

Hershey shares experienced a 12% drop when the news broke that the deal has been abandoned - and Mondelez rose by almost 4%.

Mondelez chief executive Irene Rosenfeld said that the board is "disappointed with the outcome," but it had come to the conclusion that there is "no actionable path forward toward an agreement."

"Our proposal to acquire Hershey reflected our conviction that combining our two iconic American companies would create an industry leader with global scale in snacking and confectionery and a strong portfolio of complementary brands," she continued.

Mondelez is the second-largest confectionary company in the world, trailing Mars - Hershey is the fifth biggest, but a merger would put the new combined entity in top place.

The company had anticipated little antitrust risk if a deal was agreed, as there is little geographical overlap between their interests.