U.S. auto parts retailer O'Reilly Automotive Inc said on Tuesday it reached agreement to buy CSK Auto Corp in a cash-and-stock deal worth about $528 million.
The deal represents nearly a 29 percent premium to CSK's Monday closing price.
Greg Henslee, O'Reilly Automotive Chief Executive Officer said that the combined company, will be "stronger and more competitive, with the ability to better meet the continuing evolution of the automotive aftermarket industry.
"We are creating a company that will generate significant value for the combined companies' shareholders, growth opportunities for team members and enhanced service to our customers," he added.
CSK shares
Under the agreement, CSK shareholders are to receive $11 worth of O'Reilly shares and $1 in cash for each CSK share they hold. Based on 44 million outstanding CSK shares, that values the company at about $528 million.
Including debt, O'Reilly, the third-largest U.S. auto parts retail chain, behind AutoZone Inc and Advance Auto Parts Inc, said the deal would be worth about $1 billion.
The Springfield, Missouri-based said it expected the deal to modestly boost its 2009 earnings and to result in about $100 million in annual cost savings starting in 2010.
April 1, 2008
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