Spirit Realty Capital, Inc (NYSE:SRC) shares are gaining Monday morning as it entered into a definitive merger agreement to be acquired by real estate investment trust Realty Income Corp (NYSE:O) in an all-stock transaction valued at an enterprise value of about $9.3 billion. 

The leverage-neutral transaction is expected to deliver over 2.5% accretion to Realty Income's annualized Adjusted Funds from Operations (AFFO) per share.

The merger will result in an enterprise value of approximately $63 billion for the combined company.

Under the terms of the agreement, Spirit shareholders will receive 0.762 newly-issued Realty Income common shares for each Spirit common share they own.

This will result in Realty Income and Spirit shareholders owning approximately 87% and 13%, respectively, of the combined company. 

The transaction is expected to close during the first quarter of 2024.

"Spirit's assets are highly complementary to our existing portfolio, extending our investments in industries that have proven to generate durable cash flows over several economic cycles," said Sumit Roy, President and CEO of Realty Income.

Realty Income held $314.9 million in cash and equivalents as of June 30, 2023.

Price Action: SRC shares are trading higher by 12.58% at $36.42 in premarket on the last check Monday.