Goodyear Tire and Rubber Company's announcement that it would purchase rival Cooper Tire for $2.8 billion ensures Goodyear will double its presence in China.
Following the announcement, shares of Cooper rose 20% in morning trading, while Goodyear was up 3.4%.
Goodyear officials anticipate benefiting from Cooper's strong presence in the light truck and SUV markets.
The U.S. and China continue to be the two largest tire markets in the world. One-third of all tires are sold in these markets.
The COVID-19 pandemic led to a sharp decline in demand for replacement tires and original equipment in 2020, eventually resulting in shutdowns by automakers.
Experts are hoping for a recovery this year, pointing to the widespread use of Covid vaccinations, along with low interest rates and high consumer savings.