Royal Dutch Shell says it has agreed to buy oil and gas exploration firm BG Group in a deal that values the business at $70 billion. The cash and shares offer gives investors a 50% premium on BG Group's share price on April 7. Upon completion, the merged company could have a value of more than $296 billion.

BG Group is the UK's third-largest energy company, and employs about 5,200 people in 24 countries. It was created in 1997 when British Gas demerged into two separate companies, BG and Centrica. BG took control of exploration and production while Centrica took charge of the UK retail business of the former British Gas. In 2000, BG split into BG Group and Lattice Group.

Shell CEO Ben van Beurden says the company remains committed to North Sea oil and expects to invest nearly $6 billion between 2016 and 2018.

Shell says the deal would also add 25% to its proven oil and gas reserves and 20% to production capacity. It highlighted Australia's liquid natural gas market and in deep water oil exploration off the Brazilian coast.