Shell in early discussions to acquire rival BP

Shell is holding early-stage talks to acquire rival BP in what would be the largest oil deal in a generation, people familiar with the matter said.

- Ben Dummett, Lauren Thomas & Jenny Strasburg

Talks between company representatives are active, the people said, and BP is considering the approach carefully.

Acquiring BP would put Shell on firmer footing to challenge larger competitors such as Exxon Mobil and Chevron. It would be a landmark combination of two so-called supermajor oil companies, a group of multinational behemoths that dominate the production of the world's most important energy sources.

Potential terms of any deal couldn't be learned, and a tie-up is far from certain, the people familiar with the matter warned. The discussions are moving slowly, one of the people added.

BP is currently valued at around $80 billion. Taking into account a premium, a deal could end up as the largest corporate oil deal since the $83 billion megamerger that created Exxon Mobil at the turn of the century. It would also easily be the biggest M&A deal of the year, so far, in a market that has been rattled by President Trump's trade war and other geopolitical tensions.

A Shell spokesman said: "As we have said many times before, we are sharply focused on capturing the value in Shell through continuing to focus on performance, discipline and simplification."

A BP spokesman declined to comment.