Shell PLC (LSE:SHEL, NYSE:SHEL) is in early-stage talks to acquire its rival BP PLC (LSE:BP.) in what would be the largest oil deal in decades, according to a Wall Street Journal report.
People with knowledge of the matter told the publication that discussions between representatives of both companies are active. BP is carefully considering the proposal, though the talks are progressing slowly and a deal is far from certain, the WSJ reported.
It is unlikely Shell would purchase the entirety of BP, sources familiar with the situation told CNBC.
The merger, if successful, would create a British oil company worth more than £200 billion.
BP has long been identified as a takeover target by analysts following a slew of disappointing financial results, which have seen its shares underperform relative to its peers.
BP’s US-listed shares added 1.8% at $30 on the news, while Shell’s shares were down 0.7% at about $70.