Anglo-Dutch energy giant Shell has agreed to acquire UK oil and gas exploration company BG Group in a cash and share transaction worth £47 billion ($70 billion).

Both companies have agreed an offer which will give investors a premium of about 50% to the closing price of BG Group's shares on April 7. BG Group is the UK's third largest energy company, employing 5,200 people in 24 countries.

Ben van Beurden, Shell's CEO, commented: "BG will accelerate Shell's financial growth strategy, particularly in deep water and liquefied natural gas: two of Shell's growth priorities and areas where the company is already one of the industry leaders."

The combination of the two businesses will further develop Shell's competitive position in the LNG market, including the core growth regions of Asia and the Atlantic basin. The combined group's LNG capacity is expected to be 45 million t in 2018, compared to Shell's 26 million t in 2014.

The acquisition of BG will boost Shell's proven oil and gas reserves by 25% and its production capabilities by 20%. The deal will also give it enhanced positions in competitive new oil and gas projects, particularly in Australia's LNG market and in Brazilian deep water oil exploration, Shell said.

Shell is expecting to realize annual pre-tax savings of $2.5 billion by 2018, comprising $1 billion of operating cost savings and a $1.5 billion reduction in exploration expenditure.

BG shareholders will own approximately 19% of the combined group, if the deal goes through.