Two of Japan's biggest oil refiners said Thursday they would merge in a bid to counter an industry downturn, creating a mega-firm that would control half of the country's crude market. JX Holdings said it would join forces with smaller rival TonenGeneral Sekiyu and rename the combined firm Newco Group. No financial details about the deal, scheduled to be completed by April, were released.

But the pair's combined revenue in the last fiscal year totaled 14.3 trillion yen ($115 billion) and together employed nearly 30,000 people. The announcement comes a day after U.S. benchmark West Texas Intermediate closed below $40 a barrel for the first time since August as prices are hammered by a long-running supply glut, weak global demand and a strong dollar.

JX Holdings pointed to concerns about "an environment in which demand for oil in Japan is decreasing," saying the deal would cut costs by 100 billion yen over five years as it streamlined operations and cut "redundancies." The agreement comes less than a month after two other petroleum giants - Idemitsu Kosan and Showa Shell Sekiyu - announced plans for a tie-up.

Japanese oil companies have been forced to consolidate under pressure from falling domestic demand for petrol in recent years due to the country's ageing population and the growing popularity of fuel-efficient vehicles.