Suncor Energy will buy rival Petro-Canada in a multi-billion dollar deal.

Canadian Oil Company Suncor Energy has agreed to buy compatriot rival company Petro-Canada in a multi-billion dollar all-share deal.

The deal, which is valued at 19.12 billion Canadian dollars (£10.6bn), still requires the approval of shareholders in both companies, and comes after the recent fall in oil prices.

Once merged, Suncor Energy and Petro-Canada will form Canada’s largest oil firm and will trade under the Suncor name, based in Calgary, Alberta.

Rick George, President and Chief Executive of Suncor, said: “This merger creates a made-in-Canada energy leader with the assets, cost structure and financial strength to compete globally.”

In a joint statement, both companies said that the deal is expected to save 300 million Canadian dollars in operating costs.

“The merger will be good for shareholders of both companies with reduced capital requirements, operating efficiencies and complementary integration opportunities between upstream and downstream assets”, said Ron Brenneman, current Petro-Canada CEO and President, who will become Executive Vice Chairman of the merged company.

“The increased scale provides more stability in volatile markets, plus the financial and organisational capability to successfully take on large-scale projects in the future.”