NEW YORK (AP) — Tire and auto service company Bridgestone Corp. is buying auto parts and repair company Pep Boys in for $835 million in a deal that will help Bridgestone gain a more dominant position.
The offer was for $15 per share in cash, a premium of almost 23.5 percent over Pep Boys' closing price on Friday. The deal is expected to close in the beginning of 2016 and will add 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.
Philadelphia-based Pep Boys had been reviewing options to help boost shareholder value since June. The current deal helps to achieve that goal, said CEO Scott Sider.
Pep Boys shares rose $2.83, or 23.3 percent, to $14.98 in midday trading Monday.
This story has been corrected to show the offer represents a premium of almost 23.5 percent over Friday's closing price of $12.15, not 21 percent.