United Rentals and RSC Holdings said they have entered into an agreement under which United Rentals will acquire RSC in a cash-and-stock transaction valued at $4.2 billion. Morgan Stanley Senior Funding, BofA and Wells Fargo have committed financing to support the cash portion of the deal

United Rentals and RSC Holdings announced that they have entered into a definitive merger agreement under which United Rentals will acquire RSC in a cash-and-stock transaction valued at $18.00 per share, or a total enterprise value of $4.2 billion, including $2.3 billion of net debt.

The price of $18.00 per share represents a 58% premium over RSC’s closing price as of December 15, 2011. United Rentals and RSC said they expect the transaction to close in the first half of 2012.

The cash portion of the transaction will be financed through new debt issuance and drawing on current loan facilities. United Rentals has obtained financing commitments from Morgan Stanley Senior Funding, Bank of America Merrill Lynch and Wells Fargo in support of this transaction.

The boards of directors of both companies have unanimously approved the proposed transaction and recommended that their respective stockholders approve the proposed transaction.

The proposed transaction will create a leading North American equipment rental company with a more attractive business mix, greater scale and enhanced growth prospects.

Centerview Partners and Morgan Stanley acted as financial advisors to United Rentals, and Sullivan & Cromwell acted as the company’s legal advisor. Barclays Capital and Goldman, Sachs were lead financial advisors to RSC, and Deutsche Bank also provided financial advice. Paul, Weiss, Rifkind, Wharton & Garrison and Debevoise & Plimpton acted as RSC’s legal advisors.

To read the full news release: click here.