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.Talks between company representatives are active, the people said,

Shell denied that it was in talks to buy BP after the Wall Street Journal reported on Wednesday that the oil major was in early discussions over a takeover of its British rival.

BP shares jumped as much as 10% after the Wall Street Journal reported that rival Shell is in early talks to acquire the British oil company. Shares of BP jumped $3.11, or 10%, to $32.94 in early afternoon trading. U.S.-listed shares of Shell, which is also U.K.-based, meanwhile, slid 3%.