Energy giant Shell is reportedly in preliminary talks to take over its rival BP, in a move seen as setting off the biggest oil industry merger in a generation.
The Wall Street Journal reported that talks between the two companies are progressing slowly but actively, with BP carefully examining the proposal.
If the talks are successful, the merger is expected to put Shell on par with ExxonMobil and Chevron of the United States.
BP's current market value is estimated at around $80 billion with net debt of $27 billion, while Shell is valued at more than $208 billion. BP shares jumped 6.6% in trading on Wednesday after the report was released, while Shell shares remained stable.
However, a Shell spokesman denied there were any talks, describing it as market speculation, while BP declined to comment further.
Shell CEO Wael Sawan previously stressed that the company prioritizes investor returns through share buybacks over large acquisitions.
Analysts expect any attempted merger to face significant challenges including regulatory issues and monopoly concerns given that both companies are among the world's largest oil and gas producers.
