UPDATE 1-Delta aims to start UAL, Northwest merge talks-WSJ

(Adds Delta comment, background, share prices)

NEW YORK, Jan 10 (Reuters) - Delta Air Lines Inc (DAL.N) plans on Friday to ask its board permission to begin formal merger talks with both Northwest Airlines Corp NWA.N and United Airlines parent UAL Corp (UAUA.O), the Wall Street Journal reported on Thursday.

Citing unnamed people familiar with the matter, the Wall Street Journal said on its Web site that Delta would aim to ultimately choose between the two carriers.

Delta, which emerged from bankruptcy last spring after rebuffing a hostile takeover offer by US Airways Group Inc (LCC.N), set up a special board committee months ago to help it review its strategic options, including mergers.

Betsy Talton, spokeswoman for Delta, said the No. 3 U.S. carrier was not providing updates on the special committee's work, while it was in progress.

UAL and Northwest were not immediately available from comment.

A deal between Delta and either airline would likely create the world's largest carrier, overtaking AMR Corp's (AMR.N) American Airlines. An acquisition of either airline by Delta would be worth at least $3.5 billion, based on current market values.

Airline shares, already soaring on renewed merger speculation ahead of the report, continued to rally.

In afternoon trade, Delta shares rose 14.6 percent to $15.50, Northwest surged 23.2 percent to $14.80, and UAL climbed 19.1 percent to $31.00.

(Reporting by Chris Reiter; Editing by Gerald E. McCormick)

((chris.reiter@reuters.com; +1 646 223 6116; Reuters Messaging: chris.reiter.reuters.com@reuters.net))

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