BP shares were whipsawed Wednesday as investors reacted to reports that the oil major might be acquired.

BP shares jumped more than 10% to a session high of $32.94 on a report in The Wall Street Journal that Shell was in early-stage talks to acquire BP. The report, citing people familiar with the matter, said a deal was far from certain.

BP currently has a market capitalization of around $80 billion. If Shell acquired the British oil major, it would be the largest deal the industry has seen since the 1990s, topping Exxon's purchase of Mobil for $83 billion, said Andrew Dittmar, mergers and acquisition analyst at Enverus Intelligence Research.

Shell, however, denied talks were talking place. BP shares retreated and were last up about 2%.

"This is further market speculation. No talks are taking place," a Shell spokesperson told CNBC. "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."

It is unlikely Shell would purchase the entirety of BP, people familiar with the matter told CNBC's Brian Sullivan. It is more likely that BP would be split and sold in pieces to multiple companies if a deal did transpire, the people said.

BP has underperformed Shell and U.S. rivals as it has struggled to find direction in recent years, fueling speculation that the British oil major is an acquisition target.

BP set ambitious goals five years ago to slash carbon dioxide emissions and invest in renewable energy. But its green pivot came under scrutiny as profits faltered. BP announced a strategic reset earlier this year, doubling down on oil and gas while slashing spending on renewables.

BP's attempt to turn an oil company into a renewable company was "definitely a huge error, " said Paul Sankey, lead analyst at Sankey Research on CNBC's "Power Lunch." "It's two very different costs of capital and they should have never gone near to it."

Activist investor Elliott Management disclosed in April that it has built a stake of more than 5% in BP, fueling speculation that the company would come under pressure to focus on its core fossil fuel business.