French group Bureau Veritas and Swiss company SGS are discussing a possible merger to create a certification giant worth over $30 billion (€29.12 billion) that would dwarf its competitors.

The two companies, which test and certify new products, ingredients and processes, gave few details on Wednesday of the negotiations and said there was no guarantee of an agreement.

Bureau Veritas shares jumped 6% in early trading to a record 31.54 euros. It subsequently trimmed its gains and was up 3.43% at 11:03 GMT.

SGS shares were down around 6%, with some analysts saying they expected the Swiss company to focus on its own business improvement plan.

A merger would create a company significantly larger than its competitors, including the UK's Intertek and France's Eurofins.

Bureau Veritas has a valuation of around 13.23 billion euros, according to LSEG data, and SGS around 17.4 billion Swiss francs (18.52 billion euros).

SGS employs around 100,000 people worldwide, and Bureau Veritas 83,000.

"There has never been a transaction of this size in the sector before", commented Daniel Buerki, analyst at Zuercher Kantonalbank.

"The ICT (testing, inspection and certification) market is not highly consolidated, with the four main players holding a combined market share of 20 to 25%", he added.

ICT companies have benefited from the growing interest in topics such as sustainability. Both companies are also involved in inspection services, which involve carrying out checks on other companies to ensure that efficiency and safety standards are met.

Bloomberg News reported on Tuesday that the companies were in advanced merger talks, and that final details could be announced in the coming weeks.

For JP Morgan analysts, these discussions are an unexpected development, especially as both companies have relatively new CEOs and only last year outlined their new strategies.

(Written by Angela Christy in Bangalore and John Revill in Zurich, with Gursimran Kaur, edited by Kate Entringer)