Triarc Companies Inc, the parent company of Arby's restaurants, agreed to acquire the Wendy's International Inc. fast food chain for about $2.3 billion in an all stock deal.

The combined companies, which will operate as separate brands, will create the third largest fast food company in the U.S., with about 10,000 restaurants and sales of about $12.5 billion per year.

The structure of the combined companies will include Arby's and Wendy's centers in Atlanta, Georgia, and Dublin, Ohio, respectively, focusing on operational improvements. A support center in Atlanta will oversee all company matters and central service functions, leading to cost savings, according to Triarc.

The new company will focus on breakfast menus, increasing global expansion, and growing through future acquisition.

The new board will have 12 members, including two directors nominated by Wendy's. Billionaire investor Nelson Peltz and Peter May will be the Chairman and Vice Chairman, respectively.

Through the execution of major operating improvements and the realization of synergies, we expect to generate substantial value for shareholders, said Triarc's Chief Executive Officer Roland Smith. We also expect to execute on a number of growth initiatives for the combined organization that should further increase shareholder value.

Triarc says Arby's managers will improve operations at Wendy's, eventually generating $100 million in profit annually. Synergies will cut costs by $60 million, eliminating duplicate functions. U.S. and international expansions as well as a focus on creating meals appropriate for the time of day.

Under the terms of the deal, Wendy's shareholders will receive 4.25 shares of Triarc common stock for each share of Wendy's stock, Triarc said in a statement.

Triarc shares rose 5 cents, or 0.79 percent to $6.35 in afternoon trading. Wendy's shares rose 42 cents, or 1.66 percent to $25.74.