Battle of Skalathrax
"You wish to see a unified Twelfth Legion, yes?"
"More than anything."
- – Captain Khârn and Captain Dreagher, right before Battle of Skalathrax.
"Nothing unifies like war."
- – Captain Dreagher, making quite possibly the most stupid prediction in Warhammer history.
"Warriors of the Twelfth Legion. This is Khârn. We are the Twelfth Legion. We are the sons of Angron. Our fate is not to dwindle, to be slowly snuffed out in the darkness, alone and divided. Our fate is to live and die as one Legion. I say we take this world that the Third Legion claims as their own. I say we descend on it and take the skull of every Third Legion whoreson who would stand against us. I claim this world in the name of Twelfth Legion, and I name it… Skalathrax."
- – Khârn, who proceeded to make the members of his Legion die together much quicker than they probably were expecting
Both legions were on the retreat from Terra during the Scouring; the Emperor's Children had largely kept together while the World Eaters were barely keeping themselves from destroying each other. Along the edge of a warp storm, the World Eaters found a planet - Skalathrax - that was in a pocket of normal space, a safe bastion to fortify, regroup, and rearm the legion. However, the Emperor's Children also found it at the same time. Negotiations went predictably south after Kharn insulted the Emperor's Children representative for a bit and then prompted Captain Dreagher to shoot him in the head and the two legions started duking it out. They were on the planet when it started hitting sub-zero weather that was too much for even Space Marines in Power Armour, not to mention one legion who considers any sensation pleasurable and another legion filled with psychotic berserkers. When the World Eaters decided to take a break from the slaughter, Khârn, Captain of the 8th Assault Company and equerry to Primarch Angron, was furious with his fellow battle-brothers over quitting the field. So Khârn decided to do something about it. Grabbing a flamer, Khârn rampaged around the broken city the World Eaters and Emperor's Children were fighting in, burning every building that could house people and killing everything he found. With the number of shelters dwindling, the World Eaters and the Emperor's Children were forced to fight each other for the remaining shelters left. By the time the night was over, both Legions were effectively broken into dozens of marauding warbands.
With the splitting of both legions, the warbands were forced to sell their services as shock troopers for Abaddon or whatever Chaos Lord would put up with them (and trust us, the World Eaters and Emperor's Children are people you don't want to be near). For his part, Fulgrim was content to allow the Emperor's Children to split and the Emperor's Children now roam the Eye of Terror, looking for the Pleasure Planet that Fulgrim has been given rule over. Angron, however, was royally pissed off (well, more than usual) and spent several millennia trying to put the World Eaters back together. He finally succeeded with the Dominion of Fire, gathering 50,000 World Eaters (the largest such gathering since Skalathrax) and rampaging across Imperial space, capturing over 70 sectors in two centuries before the Imperium got its act together and gathered enough Baneblades, Space Marine Chapters and Titan Legions to retaliate. Still, it took 3 millennia for the loyalists to reclaim 90% of the lost territories. Keep in mind that each sector is roughly 200 cubic lightyears and the galaxy is 170-200 000 lightyears in diameter, and that "conquered" sectors probably were more "brutally savaged" rather than actually held in the traditional sense. As for Khârn himself, Skalathrax is where he earned his legendary epithet "the Betrayer", and now roams the galaxy killing everything that comes his way except Abaddon for some reason. He is still a pretty swell guy.
A little bit of crunch
In 7th edition, a weapon you could take for your Chaos marines was the Burning Brand of Skalathrax, yes, exactly the flamer that Khârn so delightfully used. It was an AP 3 Torrent flamer with Soul Blaze, meaning it was tailor-made for killing marines in droves, just like it happened in "real life".