Shell is in early discussions to purchase rival BP. WSJ reports

The Wall Street Journal reported Wednesday that Shell has begun early discussions to purchase rival BP. This was based on the testimony of people who are familiar with the situation.

Shell's American shares depository were down 3.3% as of 1604 GMT. BP's American shares depository were up 6.5%.

The report said that BP is evaluating the proposal and has been in active discussions with company representatives.

As of Wednesday, BP's market capitalisation was over $80 billion while Shell's was more than $208 billion.

Shell's spokesperson stated: "We have repeatedly said that we are focused on capturing value within Shell by focusing on performance, discipline, and simplification."

Un spokesperson for BP declined to comment.

The report stated that it was impossible to learn the potential terms of any agreement and that a tie-up was far from being certain.

Shell CEO Wael Sawan said repeatedly in recent weeks, when asked about a possible BP deal, that Shell has a high bar for large acquisitions and that buying back Shell shares is a better use of money. (Reporting by Prerna Bedi in Bengaluru, additional reporting by Shadia Nasralla in London. Arun Koyyur, Jane Merrill and Jane Merrill edited the story.

(source: Reuters)