The deal is expected to close in the first quarter of 2021.
Shareholders of Concho Resources will receive 1.46 ConocoPhillips shares for each Concho Resources share they own. The deal values Concho Resources at $49.30 a share.
The stock of Concho Resources closed Friday at $48.60 and was falling 1.05% to $48.08 in trading Monday. ConocoPhillips declined 1.72% to $33.19.
Bloomberg had reported last week that ConocoPhillips was in talks to buy Concho Resources.
"Together, ConocoPhillips and Concho will have the unmatched scale and quality across the important value drivers in our business: an enviable low cost of supply asset base, a strong balance sheet, a disciplined capital allocation approach, ESG excellence and great people," said ConocoPhillips CEO Ryan Lance in a statement Monday.
The merger creates a combined resource base of about 23 billion barrels of oil equivalent with a less than $40 per barrel West Texas intermediate cost of supply and an average cost of supply below $30 per barrel WTI, the companies said.
Jim Cramer weighs in on the acquisition and why he thinks ESG played a big role in the move in the video above.