As rumored, Canadian gas station giant Alimentation Couche-Tard Inc. said Monday it agreed to buy CST Brands (CST) for $4.4 billion including debt.

The deal is for $48.53 per share, or $3.7 billion, a 42% premium over CST's closing price on March 3 before the company announced it was exploring strategic alternatives to enhance stockholder value.

Couche-Tard CEO and president Brian Hannasch said in a statement that the transaction will strengthen the company in the Sunbelt and the East Coast.

"We are excited to share best practices with CST as well as to combine the capabilities of CST's team with Couche-Tard's to enhance value for our stockholders," he said. "We strongly believe that our all-cash offer is a compelling one for CST's stockholders, giving them the opportunity to realize full and immediate value for their investment."

Couche-Tard's founder and executive chairman, Alain Bouchard, said he's always thought "size matters" in his industry, whether it be for purchasing, logistics, best practices or for becoming leaders for product categories. "The addition of CST's exceptional people and its strategic assets takes us one step further towards all these goals," he said.

Morgan Stanley and National Bank Financial advised Couche-Tard, whose legal counsel included Faegre Baker Daniels. BofA Merrill Lynch is assisting CST along with J.P. Morgan Chase, Wachtell, Lipton, Rosen & Katz; and Stikeman Elliott.

The Deal reported in December that several companies were eyeing an acquisition of CST, including Couche-Tard as well as Marathon Petroleum  (MPC - Get Report) and the Sunoco unit of Energy Transfer Partners  (ETP) . Seven & I Holdings, the Japanese parent of 7-Eleven, was also thought to be an interested bidder.

The Wall Street Journal reported Aug. 15 that Couche-Tard was nearing an agreement with an announcement expected last week.

TheStreet reported Aug. 16 that CST could fetch as much as $50 per share, or $3.75 billion, citing sources. Activist investor Engine Capital LP--which in part pushed CST to launch the strategic review citing underperformance compared with former parent Valero Energy  (VLO - Get Report) and Casey's General Stores  (CASY - Get Report) --had said the company could be worth more than $4 billion.

Couche-Tard, which owns the Circle K chain, expects to finance the deal with cash, credit facilities and a new term loan. It hopes to close it early next year if it clears CST's stockholders and regulatory approvals in the U.S. and Canada.

The San Antonio-based target employs more than 14,000 people at 2,000-plus gas stations and convenience stores in Texas, Georgia, New York and Eastern Canada, which operate under the Corner Store, Nice N Easy Grocery Shoppe, Flash Foods and Dépanneur du Coin banners.

CST also controls the general partner of CrossAmerica Partners  (CAPL - Get Report) with 100% of its incentive distribution rights and a large equity investment. CAPL distributes branded and unbranded road transportation fuel to 1,100 locations in the U.S.

Couche-Tard said it also agreed to sell some of CST's Canadian assets to Parkland Fuel for $750 million, including a cardlock business, its dealer and commission agents business, its commercial and home energy business, its Montreal corporate head office and some of its company-operated stores, which will be determined after the Competition Bureau of Canada's review of the transaction. Couche-Tard intends to use the proceeds from the sale to repay part of its credit facilities.

CST's chairman, CEO and president, Kim Lubel, said the deal will provide immediate and compelling value to the company's stockholders and new opportunities for career development for its employees. "With Couche-Tard, we will build upon an extensive and attractive convenience and fuel network with enhanced scale and global reach to best position the combined company for future growth," she said.

Couche-Tard has been acquisitive, buying the Ontario and Quebec gas stations of Imperial Oil  (IMO - Get Report) , which is partially owned by Exxon Mobil (XOM - Get Report) , this past March for $1.3 billion. CST had also been hoovering up outlets, buying Flash Foods last year for $425 million.

Morgan Stanley & Co. LLC's Carmen Molinos and National Bank Financial's Benoit Veronneau advised Couche-Tardm whose outside legal counsel included Faegre Baker Daniels LLP's Jeffrey Brown, Douglas Long, David Bartoletti, Elena Simion and Jason Kimpel and Davies Ward Phillips & Vineberg LLP's Sebastien Theriault, Richard Cherney, Olivier Desilets, Veronique Gaumond-Carignan, Andrea Dupuis and Adam Fanaki.

BofA Merrill Lynch's David Finkelstein, Alex Kroner, Ryan Seifert, Reggie Hayes, Rahul Barua, Matthew Quartner and Suzanne Fitzpatrick are assisting CST along with J.P. Morgan Chase. Its legal counsel included Wachtell's Gordon Moodie and Lawrence Makow and Stikeman Elliott LLP's Paul Collins, Michael Laskey, Steeve Robitaille and David Tardif.