Kinder Morgan Inc. announced on Sunday plans to buy El Paso Corp. for $21.1 billion in cash and stocks to create the largest natural gas pipeline energy company in the U.S.

This once in a lifetime transaction is a win-win opportunity for both companies, Kinder Morgan chairman and CEO Richard Kinder said in a statement. The transaction is expected to produce immediate shareholder value (upon closing) through strong cash flow accretion and offers significant future growth opportunities.

The offer is valued at $26.87 a share, which is 37 percent more than El Paso's closing price on Oct. 14, and is comprised of $14.65 in cash, 0.4187 Kinder Morgan Inc. shares and 0.64 Kinder Morgan warrants. The total value including assumed debt from El Paso is worth $37.8 billion, according to Houston-based Kinder.

Kinder will hold titles of chair in the combined company, which will result in a cost savings of nearly $350 million each year. The sale will make Kinder Morgan, a pipeline transportation and energy storage company, the fourth-largest energy company in North America, according to a statement from the company.

Kinder Morgan will sell product assets of El Paso and has a commitment letter from Barclays Capital to underwrite cash needed for the transaction, expected to close in the second quarter of 2012.