UPDATE 5-Suncor to buy Petro-Canada for C$18.4 bln

* All-share deal gives 28 pct premium on Friday price

* Cost savings of C$1.3 billion a year targeted

* Combined entity would be Canada's biggest oil company

* Deal comes after troubled period for Petro-Canada

* Petro-Canada shares rise 20 pct (Adds details, comments, closing share prices; in U.S. dollars unless noted)

By Scott Haggett

CALGARY, Alberta, March 23 (Reuters) - Suncor Energy Inc (SU.TO) said on Monday it will buy rival Petro-Canada PCA.TO to create Canada's biggest oil company, dominant in the Alberta oil sands and able to slash costs as it looks to weather a period of low oil prices.

Suncor is offering C$18.43 billion ($15.1 billion) for Petro-Canada in an all-share deal. That makes it the largest Canadian oil and gas takeover ever, according to Thomson Reuters data, and the biggest takeover of a Canadian company since 2007, when Rio Tinto (RIO.L) bought aluminum producer Alcan for $43 billion.

The deal targets C$1.3 billion in annual savings for the combined company in an environment in which plummeting oil prices have made it hard to turn a profit from squeezing crude out of the oil sands in northern Alberta, the world's biggest reserves outside the Middle East.