Royal Dutch Shell has agreed to acquire British oil and gas producer BG Group Plc in one of the biggest deals in the energy sector, which is struggling from falling oil prices.

BG Group said the companies' boards have reached an agreement on the terms of the cash and share offer made by Shell, valuing BG at about £47bn (€64bn, $70bn).

As per the terms, Shell will provide £3.83 in cash and 0.4454 Shell B shares for each BG share.

Based on the closing price of £22.08 per Shell B Share on 7 April, the combination values BG at about £13.67 per share. The price represents a premium of approximately 50% to the closing price of £9.10.4 per BG Share on 7 April.

Following the deal, BG shareholders will own about 19% of the combined entity.

BG added that the combination will add some 25% to Shell's proved oil and gas reserves and 20% to production, each on a 2014 basis, and provide Shell with enhanced positions in competitive new oil and gas projects, particularly in Australia LNG and Brazil deep water.

Shell expects the combination to generate pre-tax synergies of approximately $2.5bn per year.

"This is an important transaction for Shell, accelerating the delivery of our strategy for shareholders," said Jorma Ollila, chairman of Shell.

"The result will be a more competitive, stronger company for both sets of shareholders in today's volatile oil price world."

"BG and Shell are a great fit. This transaction fits with our strategy and our read on the industry landscape around us," said Ben van Beurden, CEO of Shell.

"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. Furthermore, the addition of BG's competitive natural gas positions makes strategic sense, ahead of the long-term growth in demand we see for this cleaner-burning fuel."

The deal still requires the approval of shareholders of both companies. It is expected to be completed in early 2016, subject to a number of conditions.