American tire manufacturing company Goodyear Tire & Rubber is set to acquire fellow tire maker Cooper Tire & Rubber  through a $2.8 billion deal.

The two companies announced the deal in a joint statement released in the U.S. Monday.

Goodyear said in a statement that it had decided to acquire its fellow Ohio tire maker to combine their two complementary portfolios. The company said that the merger should solidify its position as the world's third-largest tire manufacturer, right behind Bridgestone and Michelin.

"This is a transformational milestone for our companies," Goodyear's chief executive officer, Rich Kramer, said in a conference call.

Analysts had largely agreed with Kramer's assessment of the deal. KeyBanc analysts said that the deal is a "rare instance of a clear, great deal for both parties" and a "clear win" for everyone.

Keybanc analysts said that Goodyear will benefit from the improvement in its marketing position in major markets, while Cooper shareholders will benefit from a higher stock price. Goodyear will also finally be able to realign its brands that would not have been possible without the merger, analysts said.

Following the announcement, the stock price of both companies rose sharply Monday. Goodyear's shares closed up 21.1% percent higher at $16.82 per share; a 52-week high for the stock. Cooper Tire's share rose sharply by 29.4%, closing at $56.64 per share.

According to their press release, the two companies said that they had a combined 2019 sales of more than $17.5 billion. The companies said that they expect the merger to be completed by the second half of this year, pending regulatory and shareholder approvals.

As part of the deal, Cooper shareholders will be getting $41.75 in cash and Goodyear stock. Goodyear said that the cash and stock offer works about to about $54.36 per share, close to Cooper's Monday closing price. Based on the value, the deal is worth roughly $2.8 billion.

Goodyear said that it will be holding an 84% stake in the combined company, while shareholders will own the rest of the 16% stake. Goodyear said that the merger should result in savings of up to $165 million over the next two years as it consolidates the operations and departments of the two companies.