StockMarketWire.com - Mining giant BHP said it had agreed to sell its petroleum business to Australia's Woodside in an all-stock merger.

BHP, which also announced a 42% jump in annual net profit to $11.30 billion, said the deal would see its shareholders own 48% of the enlarged Woodside.

On a historic day for the world's biggest miner, it also gave a green light for the development of the $5.7 billion Janson potash project in Canada.

The oil deal would see BHP's petroleum business absorbed by Woodside, which would then issue new Woodside shares to BHP investors.

BHP said the merger would 'create an organisation with the scale, capability and expertise to meet global demand for key oil and gas resources the world will need over the energy transition.'

It added that the combined entity was forecast to generate more than $400 million in annual cost savings.

The Anglo-Australian miner's profit for the 12 months through June was boosted by a surge in commodity prices, including for iron ore.

It declared a full-year dividend of $3.01 per share, more than double the $1.20 declared year-on-year, including a record final payout of $2.00.

Its pre-tax profit rose to $24.6 billion from $13.51 billion, while operating profit jumped 80% to $25.91 billion.

Story provided by StockMarketWire.com