ConocoPhillips on Monday announced it is taking over Concho Resources Inc. for $9.7 billion in stock, forming a giant in the Permian Basin that would rival the output of the biggest players in the nation’s most productive oilfield.

Conoco well site

Concho, a Permian pure-play, is the fifth-largest producer by volume in the massive field. The combination marks the largest Lower 48 industry acquisition announced since the pandemic arrived in the United States in March. The deal would elevate ConocoPhillips into a small pool of dominant players in the Permian, joining leaders such as Occidental Petroleum Corp. and Chevron Corp. ConocoPhillips pro forma production with Concho is estimated at more than 1.5 million boe/d.

The deal with Concho, expected to close in early 2021, would give...