(Bloomberg) -- Bridgestone Corp. agreed to buy the Pep Boys retail chain for about $835 million, pushing deeper into an auto-parts industry that has benefited from Americans keeping their cars on the road longer.
The takeover price amounts to $15 a share in cash, the companies said in a statement today. That represents a 23 percent premium over Friday’s closing price of $12.15 and is 62 percent over where it traded on May 19, before speculation about a possible sale started.
Both company boards support the deal, which is expected to close in early 2016.
The deal unites the U.S. subsidiary of Bridgestone, the Japanese tire giant, with Pep Boys’ more than 800 auto-parts and maintenance shops. Bridgestone already operates more than 2,200 tire and automotive centers across the U.S., and the merger will create the world’s largest chain of its kind, according to the statement.
Auto-parts chains are seen as a bright spot in a retail market that has suffered from slowing foot traffic and e-commerce competition. There are more cars than ever on U.S. roads, and they’re older than ever -- partly because of the lingering effects of the recession. That’s increased demand for auto components and service centers.
A new generation of more high-tech cars also has proved a boon to mechanics. They have sophisticated parts that are more expensive and harder for amateurs to work on.
Shares of Philadelphia-based Pep Boys jumped as much as 23 percent to $14.93 in early trading after the deal was announced.