A deal with Unilever, which had a market value of $125 billion before its shares spiked, would add Hellmann's mayonnaise, Ben & Jerry's ice cream and Knorr soups to a portfolio that includes Heinz ketchup and Kraft Macaroni and Cheese.
"Kraft confirms that it has made a comprehensive proposal to Unilever about combining the two groups to create a leading consumer goods company with a mission of long-term growth and sustainable living," Kraft said in a statement.
Unilever said the offer of $50 a share, made up of $30.23 in cash and the rest in stock, "fundamentally undervalues" it.
"While Unilever has declined the proposal, we look forward to working to reach agreement on the terms of a transaction."
Unilever wasn't having any of it Friday.
"Unilever rejected the proposal as it sees no merit, either financial or strategic, for Unilever's shareholders," it said in a statement. "Unilever does not see the basis for any further discussions."
Kraft said a further statement would be made as appropriate.
Unilever shares jumped as much as 14 percent to a record high. They were up 12.9% at 0800 Eastern time at 37.70 pounds. That is below the 40 pound-per-share price mentioned by the FT Alphaville blog, which first reported rumors of the approach.
Click here to read Fortune's in-depth analysis of the forces driving Kraft Heinz's bid.
Kraft Heinz, controlled by private equity firm 3G Capital, has been widely expected to do a deal this year, given earlier reports that 3G's Brazilian principals were raising a new fund.
The approach comes after Unilever's American Depositary Receipts in New York have largely missed out on the market rally of the last two years, although their U.K.-listed shares have done better because of the decline in sterling. With sales growth flatlining, CEO Paul Polman has come under pressure from shareholders to do more to improve performance.
For Fortune's in-depth profile of Polman, which runs in the March edition of our magazine, click here.
UPDATE: This story has been updated to include a response from Unilever.