MONTREAL (AFP) - Canadian oil companies Suncor Energy and Petro-Canada on Monday announced a decision to merge in a transaction worth approximately 14 billion US dollars. The new company will operate and trade under the Suncor name, they said. "This merger creates a made-in-Canada energy leader with the assets, cost structure and financial strength to compete globally," said Rick George, who is president and chief executive officer of Suncor and who will assume the same role with the merged company. Under the merger agreement, Petro-Canada common shareholders will effectively receive 1.28 common shares of the merged company for each common share of Petro-Canada they own and each Suncor common shareholder will receive one common share of the merged company for each common share of Suncor they own. The exchange ratio represents an approximate 25-percent premium for the Petro-Canada shares. On completion of the proposed transaction, Suncor's existing shareholders will own approximately 60 percent, and Petro-Canada shareholders will own approximately 40 percent of the merged company, company officials said. The transaction is still subject to approval of Suncor and Petro-Canada shareholders. "The combined portfolio boasts the largest oil sands resource position, a strong Canadian downstream brand, solid conventional exploration and production assets, and low-cost production from Canada's east coast and internationally," George pointed out. Ron Brenneman, the current president and chief executive officer of Petro-Canada and who will assume the role of Executive Vice Chairman in the merged company, said the merger will be good for shareholders of both companies because it will provide reduced capital requirements, operating efficiencies and "complementary integration opportunities between upstream and downstream assets. "The increased scale provides more stability in volatile markets, plus the financial and organizational capability to successfully take on large-scale projects in the future," Brenneman said in a statement. The merged company will control about 7.5 billion barrels of oil resources and produce approximately 680,000 barrels of crude oil and natural gas per day, the officials said . Its refining capacity will reach 433,000 barrels of oil per day. The merged company's shares are expected to trade on both the Toronto and New York stock exchanges. The merger is expected to allow the two companies to save 300 million Canadian dollars in annual operating expenditure. Officials said these savings were expected to come from liquidating overlapping operations, streamlining business practices and improved logistics. No specifics were offered. The merged company's board of directors will be made up of 12 members, including eight directors from Suncor's current board and four from Petro-Canada's. John Ferguson, Suncor Energy Chairman, will serve as chairman of the board of directors of the merged company.