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Nippon Oil Corp. and Nippon Mining Holdings Inc. said Friday that they have agreed to merge April 1, 2010, as they step up efforts to win global business.

The deal will create one of the world’s top oil companies with sales worth $126 billion.

Under an accord signed earlier Friday, the two companies will set up a joint holding company to be named JX Holdings Inc.

One Nippon Oil share will be exchanged for 1.07 share of the new holding company, while one Nippon Mining share will be exchanged for 1.00 holding company share.

Under the accord, Nippon Oil will take over Nippon Mining in an all-share deal that values Nippon Mining above its market capitalization of Y365.8 billion as of Thursday. Based on share prices Thursday, the merger ratio under the deal values Nippon Mining at Y386.1 billion.

On the Tokyo Stock Exchange Friday, Nippon Mining was last traded at Y412, giving it a market value of Y382.5 billion.

The two companies kicked off the merger talks last December, as they felt the pinch from excessive refining capacity in Japan, which has been a major factor in damping margins in the industry.

Japan’s demand for oil products has been falling over the past three years, as large corporate users shift to clean-burned natural gas amid soaring prices and rising concerns over global warming while consumers cut down gasoline consumption by driving fuel efficient small and hybrid cars.

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