Under the terms of the deal, Nationwide Health (NHP) shareholders will get 0.7866 Ventas shares for each NHP share held. This represents a premium of 15.5 percent over NHP's Friday close of $38.96.
Ventas, which has been on a shopping spree since October last year, said on closing of the deal, Ventas shareholders will own about 65 percent and Nationwide Health shareholders will own about 35 percent of the combined company.
With Ventas' successful track record of value-creating transactions and NHP's longstanding history of regional, asset-level acquisitions, taken together with one of the strongest balance sheets in the REIT industry, Ventas' Chief Executive Officer Debra Cafaro said.
The deal is expected to close in the third quarter of 2011 and add to Ventas's normalized funds from operations immediately after the close.
Ventas CEO Cafaro will lead the combined company. Douglas Pasquale, current NHP CEO, will serve as a senior advisor to ensure an orderly transition.
Centerview Partners LLC is acting as the financial adviser to Ventas and J.P. Morgan Securities LLC is the financial adviser to NHP.
Ventas shares, which have gained 2 percent since it reported its fourth-quarter results earlier this month, closed at $57.19 on Friday on the New York Stock Exchange.
(Reporting by Krishnakali Sengupta and Sweta Singh in Bangalore; Editing by Jarshad Kakkrakandy, Roshni Menon)