Nippon Oil and Nippon Mining on Friday signed the largest merger deal in Asia so far this year as they agreed to create JX Holdings, a petroleum refining group worth Y1,030bn ($11.3bn) that they hope will challenge global majors such as ExxonMobil.

The combined group, which will begin operations in April, is expected to rank among the world’s 10 largest private sector oil companies by revenues, although low profit margins mean it will lag behind in terms of profits and market value. Nippon Oil and Nippon Mining had been negotiating under a memorandum of understanding announced last December.