Trucking giant Yellow Corp. on Tuesday agreed to buy rival Roadway Corp. for $966 million in cash and stock, a large premium in a deal that would further consolidate an industry plagued by bankruptcies in recent years.

Under the terms of the deal, Overland Park-based Yellow also will assume $140 million in Roadway debt and Roadway will be positioned as a unit within the newly named Yellow-Roadway Corp.

“Our fundamental approach is to keep both brands in the marketplace,” Yellow CEO Bill Zollars said.

Both companies are less-than-truckload carriers, meaning they consolidate freight from multiple customers, but Zollars said the brands might specialize in different things over time.

Despite the weak economy, the trucking sector benefited in the past year from the September collapse of Consolidated Freightways, which filed for Chapter 11 and liquidated its assets. That enabled Yellow, Roadway and other competitors to snap up market share.

In the year ending March 31, Yellow and Roadway had combined revenue of nearly $6 billion. Once combined, the companies said they expect to save $45 million by the end of their second year together.

“This strategic combination brings the strengths of Yellow and Roadway together to capture significant synergies and growth opportunities,” said Zollars, who will be chairman, president and CEO of the new company.

The deal is expected to be completed by the end of the year and shares of Roadway will be converted into 1.924 shares of Yellow common stock.

Wednesday, shares of Roadway closed up 52 percent to $15.65. Shares of Yellow fell 8.6 percent to $22.39.