Dive Brief:
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Kurume, Japan-based Bridgestone Corp.’s U.S. subsidiary has agreed to buy the Pep Boys auto-parts chain for about $835 million.
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The deal would close at the beginning of 2016.
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Bridgestone operates more than 2,200 tire and automotive centers in the U.S., and a merger with Pep Boys would create the largest auto service and supplies retailer in the world.
Dive Insight:
Pep Boys is one of the oldest auto-parts chains in the U.S., having launched in 1921 in the age of the Model T.
The business in general is doing well these days as there are more older cars on the road, a lingering side effect of the recent U.S. recession.
Plus, more sophisticated, computer-based auto machinery has helped blunt e-commerce’s incursion into the space, with amateur mechanics less able to work on their own cars.
“This is a clear sign that Bridgestone is committed to its retail strategy in the U.S.,” Nicholas Mitchell, an analyst at Northcoast Research Holdings LLC, told Bloomberg. “We think Pep Boys will enable them to improve their service base.”
