German chemicals giant BASF has agreed to merge its Wintershall oil and gas unit with the DEA energy firm owned by Russia's billionaire entrepreneur Mikhail Fridman.

The multi-billion-euro deal will create "one of the largest independent European exploration and production companies" with "significant growth potential" and scope for synergies, BASF said in a statement late Thursday.

BASF said it would initially hold 67 percent of shares in the joint venture, which will go by the name Wintershall DEA.

The remaining shares will be held by the LetterOne group, Fridman's Luxembourg-based investment group which owns DEA.