UPDATE 2-Waste Management to buy Stericycle in $7.2 bln deal

Adds details, background throughout

June 3 (Reuters) - Waste Management will buy Stericycle SRCL.O in a deal valued at $7.2 billion, as it looks to tap into the growing healthcare waste disposal market in the United States.

WM said it offered $62 per share, which represents an equity value of $5.75 billion for Stericycle and an about 20% premium to the stock's Friday close.

Stericycle helps local clinics, surgery centers and hospitals dispose of their biohazardous and pharmaceutical waste.

The companies said the deal, expected to close by the fourth quarter of the year, will generate more than $125 million in annual cost cuts.

The deal is also expected to be accretive to WM's earnings and cash flows within one year of its close.

Shares of Houston, Texas-based WM, which recycles trash into clean and renewable energy, were down 1.3% in premarket trading. They have risen 18% this year.

The company, which recently signed a sustainability partnership with Major League Baseball, beat analysts' estimates for first-quarter profit in April, aided by higher prices and steady demand for garbage collection and disposal from residences in the United States.

Centerview Partners LLC served as WM's financial adviser, while Vinson & Elkins L.L.P and Baker Botts L.L.P served as its legal counsel.

(Reporting by Nathan Gomes in Bengaluru; Editing by Krishna Chandra Eluri and Shinjini Ganguli)

((Nathan.Gomes@thomsonreuters.com;))