Shareholders have overwhelmingly backed a proposed merger between US oil firms Phillips Petroleum and Conoco Inc., paving the way for the creation of a new US oil giant.

Phillips said that investors holding 97% of its stock voted for the tie-up, while a similar proportion of Conoco's shares were cast in favour.

Pending US regulatory approval, the two companies are now on track to join up under the name ConocoPhillips in the second half of the year.

The merged company, worth about $35bn and with a 2.2 million barrels a day capacity, would be the third biggest US oil producer after Exxon Mobil and Chevron Texaco.

Rival bid seen off?

The landslide vote in favour of the tie-up makes it less likely that one of the established oil giants will launch a takeover bid against one of the merger partners.

"The vote diminishes the chances of another bid because it makes it a lot tougher," said Fadel Gheit of Fahnestock & Co.

The merger had been considered vulnerable to a hostile takeover bid because if offers few direct gains to shareholders.

France's TotalFinalElf and Chevron Texaco of the US had been named as possible bidders for one or other of the two companies.

Markets cheer

The Conoco-Phillips combination is the latest in a wave of tie ups to sweep through the global oil industry, triggered by a steep slump in oil prices during the late 1990s.

Investors welcomed the ballot result, lifting Conoco shares by 28 cents to $28.76, and sending Phillips stock 89 cents higher to $62.35.

Phillips chief executive Jim Mulva is to head up the new company, which will be based in Houston.

Phillips and Conoco have said their merger will achieve annual cost savings of $750m and boost oil and gas output by 4% a year.