Goodyear Tire & Rubber Co. agreed to purchase Cooper Tire & Rubber Co. for about $2.8 billion, strengthening its place as No. 1 within the U.S. market and nearly doubling its presence in China, the place auto gross sales are surging once more.

Cooper shareholders will obtain $41.75 a share in money and 0.907 shares of Goodyear, or about $54.36 a share in whole, in accordance with an announcement Monday. That’s 24 p.c above Cooper’s closing worth as of Feb. 19.

With Cooper, based in 1914, Goodyear positive aspects the fifth-largest tire producer in North America by income, with about 10,000 staff worldwide. In China, Akron, Ohio-based Goodyear will acquire higher entry to native producers and create broader distribution for Cooper alternative tires.

The tire trade is recovering from the pandemic hunch. Final week French tire maker Michelin predicted enterprise will return to pre-pandemic ranges within the second half of 2022, with CEO Florent Menegaux saying the corporate must rebuild inventories after demand snapped again extra strongly than anticipated late final 12 months.

Cooper shares jumped 17 p.c to $51.15 in early U.S. buying and selling. Goodyear’s stock declined 3.8 p.c.

Goodyear shareholders will personal about 84 p.c of the mixed tire firm. It anticipates financial savings of about $165 million over two years from the merger.

The deal, which should meet sure regulatory necessities and have to be permitted by Cooper shareholders, is anticipated to shut within the second half of 2021, the businesses stated within the joint press launch.