Pep Boys Agrees to Be Acquired by Icahn

Iconic Philadelphia brand Pep Boys is being acquired by Carl Icahn for $1 billion following a bidding war with the Japanese tire company Bridgestone.

The deal is expected to close in the first quarter of next year.

Icahn Enterprises offered $18.50 in cash for each share of Pep Boys, a $1.50 more per share than the most recent offer from Bridgestone. Bridgestone bowed out Tuesday. Because Pep Boys previously agreed to a deal with Bridgestone Corp., Icahn Enterprises paid the company a $39.5 million termination fee.

Pep Boys - Manny, Moe & Jack, based in Philadelphia, operates more than 800 locations selling auto parts.

Icahn says Pep Boys has great growth potential when matched with Auto Plus, an auto parts distributer that Icahn Enterprises owns.

The company's tire business has been under pressure.