Iconic North American chocolate manufacturer Hershey Co has rejected a $US23 billion ($AU31 billion) offer by Mondelez International that would create the world’s largest confectioner.

The snub underscores the challenges Mondelez faces in wooing Hershey’s controlling shareholder, the Hershey Trust, a $US12 billion charity created by the company’s founder more than a century ago.

The Trust’s reputation has recently been muddied by allegations some board members have been spending funds.

Earlier this year, it was rumoured Mondelez International, the maker of Oreo cookies, had assured Hershey it would keep its name and preserve jobs.

Mondelez is the second-largest confectionery company in the world, while Hershey ranks number five. Combined, they would own the largest share of the global market (18 per cent), leapfrogging Mars Incorporated.