NEW YORK (MarketWatch) -- Continental Airlines Inc. and United Airlines parent UAL Corp. said Monday they would merge their operations in a $3 billion-plus all-stock deal that would create the world's No. 1 global carrier, with combined annual revenue of $29 billion.

The transaction, valued at roughly $3.15 billion, follows weeks of negotiations that were hung up most recently over price terms.

The United Airlines brand name will take over, and United Continental Holdings Inc. will be the holding company. The new airline will be based in United's hometown of Chicago.

Under the deal that finally emerged, Continental shareholders will receive 1.05 UAL shares (US:UAUA) for each share of common stock that they now own. UAL shareholders will own 55% of the company.

Continental Chief Executive Jeffrey Smisek has been tapped as CEO of the combined company and is slated eventually to become its chairman. Glenn Tilton, CEO of UAL, will serve as nonexecutive chairman through 2012.