The combined company is expected to be valued at more than 200 billion pounds ($296 billion). Reuterss

Royal Dutch Shell announced Wednesday that it has agreed to buy BG Group in a deal valued at 47 billion pounds ($70 billion). The two companies said in a joint statement that the agreement will entitle investors to receive about 52 percent premium on BG Group’s share price on April 7.

As part of the deal, Shell would pay the amount in a mix of cash and shares that would value each BG share at about 1,350 pence, according to the joint statement. The deal is also expected to generate pre-tax synergies of about $2.5 billion a year, while resulting in BG shareholders owning about 19 percent of the combined group, Reuters reported.

According to Shell, BG Group shareholders will have higher dividends as the company has confirmed its intentions to pay its existing shareholders $1.88 per ordinary share in 2015. Shell also expects to begin a share buyback program in 2017 of at least $25 billion for the period between 2017 and 2020.

The latest deal is expected to be one of the biggest of 2015, and is also the first big merger between energy companies in a decade, BBC reported, adding that the combined company could be valued at more than 200 billion pounds ($296 billion).

Shell said the deal would boost its "proved" oil and gas reserves by 24 percent, and add 20 percent to its production. The deal is also expected to provide Shell with enhanced positions in new oil and gas projects, particularly in Australia LNG and Brazil deep water.

“This is an important transaction for Shell,” Shell Chairman Jorma Ollila said in a statement. “The result will be a more competitive, stronger company for both sets of shareholders in today’s volatile oil price world.”