Yokohama Rubber acquisition attempt is pushed back

The Sweden-based Trelleborg Group has announced its intended sale of Trelleborg Wheel Systems (TWS) to Japan-based Yokohama Rubber Co., announced this March, will not be completed before the end of 2022, as previously anticipated.

A statement from Trelleborg says the transaction, delayed by regulatory hurdles, “is instead expected to take place during the first half of 2023, likely in the first months of the year.”

The Swedish company indicates “regulatory approval in a number of countries is still pending,” and says its announcement is intended “to clarify” the status of the sale.

Trelleborg describes its TWS business unit as “a leading global supplier of tires and complete wheels for off-highway vehicles and specialty applications.”

In its March announcement of the sale to Yokohama Rubber, Peter Nilsson, president and CEO of Trelleborg Group, remarked, “Under Trelleborg’s ownership, TWS has during the past few years more than doubled in size and substantially increased its profitability. Today, the business is in great shape. While evaluating different alternatives for the Group we have concluded that a divestment at this valuation generates the most shareholder value and creates exciting opportunities going forward.”

Yokohama Rubber stated in March that it “believes the TWS acquisition will provide it with a more complete product brand structure, strengthen its service network, broaden its regional sales network, and boost its sales of OE [original equipment] tires.” Yokohama said of tires made and sold by TWS, agricultural tires account for about 60 percent and industrial tires about 20 percent, “with the remainder being tires for construction machinery and motorcycles.”

The bulk of Yokohama’s business is in the passenger car tire market, but the company has been making moves to expand its commercial (truck and bus) and off-the-road (OTR) tire presence, with the TWS acquisition a key part of the latter effort.

Additionally, says the company, it has invested in an OTR tire plant in India designed “to expand the production capacity of Yokohama [OTR tires] by about 40 percent over the 2019 level.” Continues the firm, “Our truck and bus (TBR) tire business is making improvements at its Mississippi plant in the United States, where it expects to achieve an all-time high in TBR tire output in 2022.”