Yokohama Rubber Buys Swedish Wheel Systems Maker

 

Yokohama Rubber said on Friday it plans to pay 265.2 billion yen ($2.18 billion) for all outstanding shares in Sweden’s Trelleborg Wheel Systems, as the Japanese company moves to expand its international business.

The Swedish company makes and sells off-highway tyres (OHT) for agricultural and industrial machinery.

Trelleborg Group said the transaction was on a cash and debt free basis, which represents 13 times the business area’s 2021 operational earnings before interest, taxes, depreciation, and amortisation.

Less than 3% of the purchase price is subject to the performance of Trelleborg Wheel Systems in 2022, the Swedish company said.

Trelleborg chief executive Peter Nilsson said the divestment was intended to focus the company on the healthcare and medical, automation and aerospace sectors, as well as in specialty industrial applications.

“The divestment creates a more coherent portfolio with similar business models and drivers,” he said. “It improves our profitability and capital efficiency, while the transaction also reduces our cyclicality.”

Yokohama Rubber said the acquisition would contribute to the expansion of Yokohama Rubber’s OHT business, “which has positioned as a future growth driver for the company’s commercial tyre business”.

It said the purchase would also “open the door to new customers” for tyres, as about 30 of the 60-plus original equipment manufacturers supplied by Trelleborg would be new customers for Yokohama Rubber.

 

• George Russell

 

READ MORE:

Hitachi to Build Plant for Washington Subway Cars – Nikkei

Japan Prosecutors Appeal Over Nissan’s Kelly – The Mainichi

Toyota Stalls Japan Production Lines Over Supply Shortages