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Story by The Wall Street Journal

Royal Dutch Shell PLC is in talks to acquire BG Group PLC, according to people familiar with the matter.

BG, a gas producer, has a market capitalization of £31 billion ($46 billion), meaning a deal for the company would be one of the year’s biggest.

A deal of this size also would solidify what was already shaping up to be a banner year for mergers and acquisitions. In the first quarter, deal volume rose 24% to $874.1 billion globally.

In February, BG Group said it was writing down the value of its oil-and-gas assets by nearly $9 billion, as the company adjusts to the plunge in oil prices.

Shell also has taken steps to adjust to lower commodity prices. In January, the company said it would curb its planned spending over the next three years by $15 billion and scale back on shale investments.

Shell has a market capitalization of $192.4 billion.