CHICAGO-A $7.4 billion purchase of Nationwide Health Properties Inc. by locally based Ventas Inc. has been approved by the boards of directors of both companies. Pending shareholder approval, Ventas plans to pay the equivalent of $44.99 per share for 65% ownership of the Newport Beach, CA-based NHP.

Shareholders of NHP will own 35% of the company once the deal closes in the third quarter, according to a statement released by both companies this morning. The transaction will create the largest health care REIT, with a pro-forma equity value of about $17 billion. The combined company will have more than 1,300 total assets in 47 states, Washington, DC and two Canadian provinces.

Debra Cafaro, chairwoman and CEO of Ventas, said in the statement that her firm has acquired company with a similar culture. “The combination of Ventas and NHP increases the scale and diversification of the combined company, the strength and flexibility of the company’s balance sheet, and the quality and geography of the assets,” she said in the statement.

Cafaro will remain in her position, and the company will remain based in Chicago. Douglas Pasquale, the current NHP chairman, president and CEO, will serve as a senior advisor to ensure an orderly transition, and will join two other current NHP directors on the 13-member Ventas board.

According to the statement, private pay sources will account for 70% of the combined company’s $1.3 billion in NOI. Seniors housing will account for approximately 55% of the combined company’s NOI, with skilled nursing facilities and MOBs accounting for approximately 22% and 11%, respectively.

High growth seniors housing operating assets will account for 26% of the combined company’s NOI, while no single tenant or operator will account for more than 19% and the top three tenant/operators together will represent approximately 46%. The firm will own 643 seniors housing assets.

The acquisition will add to Ventas’ medical office building portfolio, already beefed up by the trust’s purchase of Lillibridge last summer, with the addition of NHP’s joint venture with Pacific Medical Buildings and extensive hospital and health-system relationships. The combined company will have approximately 14 million square feet of owned and managed MOBs.

Shares of NHP shot up to its highest level in its history this morning, get to almost $44 per share, and at $42.56 at noon today. Shares of Ventas dropped sharply from $57.14 per share to a today low of $54.20 per share by 11 a.m., rising to $55.18 by noon.

Centerview Partners LLC is acting as financial advisor to Ventas, and Wachtell, Lipton, Rosen & Katz is acting as legal counsel. JP Morgan Securities LLC is acting as financial advisor to NHP, and Skadden, Arps, Slate, Meagher & Flom LLP is acting as legal counsel.