Yokohama Rubber completes purchase of Trelleborg Wheel Systems

Trelleborg, Sweden – Trelleborg Group has finalised the sale of its Trelleborg Wheel Systems (TWS) business to Yokohama Rubber Co. (YRC), the companies have announced.

“The transaction has received the approval of all the relevant authorities and the remaining necessary documentation has been signed by the parties,” Trelleborg said 2 May.

The total purchase consideration amounts to €2.156 billion (SEK24.425 billion), based on the exchange rate on the completion date.

The figure includes both the purchase price and 'earn-out', as well as an adjustment of the working capital, the Swedish group added.

Trelleborg expects the divestment to yield a capital gain of SEK6 billion, to be recognised as non-recurring income in the second quarter of the year.

The tire & wheel manufacturing operation has been part of Trelleborg since 1905. The unit last year reported sales of SEK13.3 billion.

The divestment will enable Trelleborg to have a “a more cohesive portfolio of operations with similar business models and drivers,” stated president and CEO Peter Nilsson.

“We increase exposure, in relative terms, to fast-growing industries such as aerospace, healthcare & medical, and several other attractive niches,” he added.

There will also be "greater scope for business acquisitions, repurchase of shares, investments in operations, and dividends,” added Trelleborg CFO Fredrik Nilsson.

“The acquisition fits perfectly with our medium-term management plan, YX2023,” said Masataka Yamaishi, YRC president and chairman of the board.

“TWS’s wide range of products and brand portfolio, global sales and manufacturing footprint… will enable us to consolidate our position among the top tire producers in the world,” he added.