ExxonMobil will acquire XTO Energy for $41bn, in a move expected to boost the company's gas business.
The transaction is expected to increase ExxonMobil's standing in the North American natural gas sector, aiding the development of unconventional natural gas and oil resources.
According to the terms of the agreement, ExxonMobil will issue 0.7098 common shares for each XTO common share, which is a 25% premium for XTO stakeholders.
The resource base of XTO contains the equivalent of 45 trillion cubic feet of gas and consists of tight gas, shale gas, shale oil and coal bed methane.
ExxonMobil's financial adviser for the deal is JP Morgan Securities, while Barclays Capital and Jefferies & Company will represent XTO.
The deal, which is subject to regulatory clearance and XTO stockholder approval, is expected to conclude in the second quarter of 2010.