The Yokohama Rubber Co. Ltd. has entered into a share purchase agreement with Swedish-based Trelleborg AB to acquire all outstanding shares of Trelleborg Wheel Systems Holding AB (hereafter, TWS), manufacturer of off-highway tires (OHT) for agricultural and industrial machinery.
The deal values EUR 2,100 Million on a cash and debt free basis, which represents 13x the business area’s 2021 operational EBITDA, or 17.5x 2021 EBIT.
Of tires manufactured and sold by TWS, agricultural tires account for about 60% and industrial tires about 20%, with the remainder being tires for construction machinery and motorcycles. In addition, it has a lineup of tires in each product category that supports all types of vehicles and vehicle sizes, from the smallest to the largest.
TWS has 14 manufacturing plants in nine countries—7 in Europe (Italy, Latvia, Serbia, Slovenia, and 3 in the Czech Republic), 2 in the United States, 1 in Brazil, and 4 in Asia (2 in China and 2 in Sri Lanka). About 70% of its sales are in Europe. TWS also is actively promoting ESG activities, including setting high targets for its shift to renewable raw materials. Over the next five years, it plans to increase the ratios of biomaterials used in its products by 10 percentage points.
Under Trelleborg’s ownership, Trelleborg Wheel Systems has during the past few years more than doubled in size and substantially increased its profitability, growing its business through important acquisitions and strategic investments, building a strong and attractive company in the off-highway business.
The acquisition of Trelleborg Wheel Systems, will enable The Yokohama Rubber Company Ltd. to consolidate its position among major tire producers in the world, becoming a global supplier in the off-highway segment, covering different market needs in the agricultural, construction, material handling, mining and 2 wheels market segments with the addition of Trelleborg, Mitas, Maximo, Cultor and Interfit brands to its portfolio.
Paolo Pompei, President of Trelleborg Wheel Systems, says “Personally, I am extremely grateful to Trelleborg, which has over more than 100 years created one of the most successful off-highway businesses in the world, and which continuously invested in our growth and technological leadership.
At the same time, I am really excited to join a leading rubber company that will keep investing in our future and support our successful onward journey. I am confident that we will continue to flourish with The Yokohama Rubber Company Ltd. as a strong owner.”.
Completion of the transaction is subject to the approval of the relevant authorities and is expected to be completed in the latter part of 2022. In the meantime, Trelleborg Group’s and Trelleborg Wheel Systems transaction teams will continue to manage the activities up till closing.