Nestlé has confirmed it is in talks about a possible takeover of Chinese confectionery company Hsu Fu Chi.

The world's largest food maker said yesterday (4 July) that it was "engaged in preliminary confidential discussions" with the Chinese firm. Nestlé declined to comment further.

In a notice to the Singapore Stock Exchange, Hsu Fu Chi had said yesterday (4 July) that it was in "preliminary discussions" in relation to a "possible transaction relating to the company, which may or may not lead to an offer being made".

Hsu Fu Chi yesterday asked for trading in its shares to be suspended following speculation of talks between the two companies.

In an earlier statement, Hsu Fu Chi said that it had "long been pursuing strategic talks with potential confectionery partners" as part of the "sustained development of the enterprise and its brands".

It said that "interactive contacts" had been conducted with counterparts from Japan, Europe and the US for years under a continued policy.