Shares of General Mills briefly surged more than 7 percent Thursday on speculation the maker of Cheerios cereal could become the next target of private equity firm 3G Capital.
However, the stock retreated after CNBC reported that there was no truth to the rumor.
Sources told CNBC that General Mills had not struck a deal to be acquired by either 3G or Kraft Heinz.
The speculation about General Mills was triggered by a report from a relatively unknown news outlet called MT Newswires on Thursday that claimed the food company "reportedly agreed to be acquired by private equity firm 3G Capital in an all cash transaction." The report cited unnamed sources and said the deal could be worth more than $49 billion.
Indeed, 3G is known as a major investor in the food and beverage sector and even teamed with Warren Buffett's Berkshire Hathaway on some deals.
3G, or affiliates of the buyout firm, previously have invested in companies such as Kraft Heinz, Burger King, Tim Hortons and Anheuser-Busch. Yet a recent attempt to buy multinational Unilever failed and the Kraft Heinz business has been struggling with lackluster results.
In afternoon trading, General Mills was up 91 cents, or 1.6 percent, to $56.96. Volume was unusually heavy with more than 15 million shares changing hands just after 1 pm ET compared with its 10-day average daily volume of 3 million shares. The stock spiked above $60 earlier in the session before falling after the CNBC report.
General Mills stock is down 7 percent so far this year. The Minneapolis-based company on Wednesday announced Jeffrey Harmening as CEO, succeeding Ken Powell, who will remain as the company's chairman until he retires next year. The change is effective June 1.
— CNBC's David Faber contributed to this report.