"As a combined company, we will be even stronger and more competitive, with the ability to better meet the continuing evolution of the automotive aftermarket industry," said O'Reilly Automotive Chief Executive Officer Greg Henslee.  "Additionally, 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."

"The benefits of this transaction are very compelling," said Larry Mondry, CSK Auto's president and CEO. "After careful consideration of a number of viable alternatives, our board has determined that partnering with O'Reilly is clearly the best course of action for our shareholders.

"As part of a stronger, more financially flexible company, shareholders, creditors and suppliers will have a meaningful opportunity to participate in the development of a company that will be well positioned to be a nationwide leader in the automotive aftermarket industry," Mondry said. "Equally important, this transaction provides growth and advancement opportunities for CSK's team members."

Under the terms of the agreement, CSK shareholders will receive $11 in O'Reilly common stock, subject to a collar, plus $1 in cash for each share of CSK common stock.

Following the close of the transaction, O'Reilly will be the third-largest national auto parts retailer with about 3,200 stores across the United States. The combined companies had pro forma revenues of approximately $4.4 billion in 2007.

O'Reilly and CSK maintain highly complementary business models in two regions of the country. Building on the foundation of CSK's strong Western presence and O'Reilly's Midwestern and Southeastern presence, the combined company will be well positioned to further leverage O'Reilly's very effective dual-market strategy, officials said.

Additionally, acquiring CSK will give O'Reilly a national platform and will allow further expansion into other geographical regions throughout the country, they said.

O'Reilly expects to strengthen CSK's existing operations by executing its proven dual-market strategy of providing exceptional service to both DIY customers and professional installers. The implementation of O'Reilly's industry-leading distribution and inventory management systems will further improve the combined company's competitiveness in CSK's markets, officials said.

O'Reilly anticipates that the transaction will moderately boost O'Reilly's earnings per share in fiscal year 2009. Cost savings are expected to be approximately $100 million annually beginning in fiscal year 2010, resulting in more significant earnings per share accretion.

O'Reilly expects benefits to come primarily from the combined companies' buying power to lower product acquisition cost and streamlining CSK's SG&A expense structure by implementing O'Reilly's dual-market strategy.