Tire and auto service company Bridgestone Corp. agreed to buy auto parts and repair retail chain Pep Boys for $835 million on Monday.
The deal will help Bridgestone gain a more dominant position in the auto parts industry that has benefited from Americans keeping their cars on the road longer, according to Bloomberg.
The takeover price amounts to $15 per share in cash, and marks a 23 percent premium to Pep Boys' closing price of $12.15 on Friday, reported CNBC.The deal is expected to close in the beginning of 2016 and will add Pep Boys' 800 locations to Bridgestone's nationwide network of 2,200 tire and automotive service centers.
The deal comes months after Pep Boys-Manny, Moe & Jack's president and CEO resigned as the speculation built over whether the company was considering a sale. Tokyo-based Bridgestone Corp., said the move will help accelerate its global growth strategy.
"Our shared expertise and commitment to our customers and employees will help us build an even stronger organization," Gary Garfield, CEO and President of Bridgestone America, which is based in Nashville, Tennessee, said in a statement, according to the Associated Press.
Philadelphia-based Pep Boys had been reviewing options to help boost shareholder value since June. The current deal helps to achieve that goal, said current CEO Scott Sider.
Pep Boys shares rose 20 percent, to $14.99 in pre-market trading following the announcement.
