United Rentals announced Friday that it will buy rival RSC Holdings for $4.2 billion in a deal that will create one of North America’s biggest equipment rental companies.
The cash-and-stock transaction, which has been approved and recommended to shareholders by both boards, values RSC at $18.00 per share, including $2.3 billion of net debt. It is expected to close in the first half of 2012.
United Rentals , which bought the assets of Blue Mountain Equipment Rental earlier this month, also launched a $200 million share buyback program Friday.
They hope to get over $200 million of annual cost savings from the deal, mainly by cutting their spending on infrastructure, overheads and branches.
Michael Kneeland, president and chief executive officer of United Rentals, said, “This transaction marks a transformative moment in our company’s history.”
Erik Olsson, RSC’s chief executive officer and president, said, “I am confident that by partnering with United Rentals we can accomplish far more than either company could have achieved on its own, including significant synergies.
Kneeland and Jenne Britell, United Rentals’ chairman, will keep their positions at the combined companies.