Trelleborg has agreed to sell its wheel systems unit to Yokohama Rubber Co. Ltd for €2.1 billion. Known for its specialist agricultural tyres, Trelleborg has now removed itself from the tyre market altogether. The deal comes three months after speculation surfaced that the Japanese manufacturer was interested in acquiring the unit.
The transaction, which in effect will double the size of Yokohama Rubber’s off-highway tire business, is set for completion “in the latter part of 2022” subject to regulatory approvals, the companies disclosed in separate announcements.
It’s understood that Trelleborg will focus on other interests, including the industrial side of the business. With €2.1 billion becoming available once the sale is complete, CEO, Peter Nilsson, suggests that the company intends to “grow Trelleborg into the world’s foremost engineered polymer solutions company in our selected industries, such as healthcare and medical, automation and aerospace, as well as in specialty industrial applications”.
Meanwhile, Yokohama Rubber says the acquisition will contribute to the expansion of its off-highway tyres (OHT) business. The company’s target is to improve the ratio of consumer sales to commercial sales, that stands at 2:1 now. This is expected to help bring the sales composition of the group’s business more in line with the overall market and secure earnings growth. It was also pointed out that half of the customers supplied by Trelleborg would be new to Yokohama, expanding its customer base by a significant amount.