Sector Snap: Auto Parts Retailers

O'Reilly also plans to assume $500 million in the Phoenix-based company's debt. The combined company will be the third-largest U.S. auto parts retailer, O'Reilly said.

The news sent CSK shares surging $2.34, or 25 percent, to $11.65 in heavy morning trading, after peaking at $11.71 earlier in the day. Meanwhile, O'Reilly shares rose $1.47, or 5.2 percent, to $29.99, after reaching $30.50 earlier.

Elsewhere in the sector, Advance Auto Parts Inc. rose $1.17, or 3.4 percent, to $35.22, while AutoZone Inc. rose $4.23, or 3.7 percent, to $118.06.

Matthew J. Fassler of Goldman Sachs said the deal represents the best possible outcome for the sector.

"O'Reilly is best suited to integrate CSK, and its focus on integration will benefit Advance Auto Parts," Fassler wrote in a note to investors.

The possible sale of CSK has been in the works for several months.

CSK said in February that it had entered in a standstill agreement with O'Reilly that would allow it to share nonpublic information relating to its business.

That came after O'Reilly made a hostile bid to acquire CSK for about $352 million in stock. CSK responded by adopting a "poison pill" shareholder rights plan in an effort to prevent a takeover.

CSK hired JPMorgan Chase & Co. in December to help evaluate strategic alternatives for the company. More than 20 parties entered into customary confidentiality and standstill agreements, but O'Reilly originally declined to be part of the process.