Bridgestone to Acquire Bandag for $1.05 Billion

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ire maker Bridgestone Americas Holding said Tuesday it would acquire tire retreading company Bandag Inc. in a deal worth $1.05 billion, based on cash purchase of Bandag’s stock, at $50.75 per share cash.

Bandag's stock price closed at $45.04 Monday and jumped more than 12% to more than $50 in Tuesday's trading, Bloomberg reported.

Bandag had sales of $921 million last year, and it will operate as a wholly owned subsidiary of Bridgestone when the deal is completed, the companies said.

Bandag’s board unanimously approved the agreement, which the two said they expected would close late in the first quarter or early in the second quarter of 2007.

Bridgestone, which makes Firestone tires, in September signed an agreement to supply Volvo and Mack trucks in North America with tires. (Click here for previous coverage.)

Bandag has a network of more than 900 dealers that produce and market retread tires and provide tire management services. It also owns and operates Tire Distribution Systems, which sells and services new and retread tires, and holds an 87.5% interest in Speedco Inc., a provider of on-highway truck lubrication and tire services to fleets and owner-operators.