Japanese tire manufacturer is buying Trelleborg Wheel Systems

By Bob Steenson, bsteenson@charlescitypress.com

Yokohama Rubber Co. has agreed to purchase Trelleborg Wheel Systems, a part of Sweden’s Trelleborg AB, for $2.3 billion in cash and no debt, the two firms announced recently.

The acquisition of Trelleborg Wheel Systems, which makes tires for agricultural and industrial equipment and has a large tractor tire production plant in Charles City, is a part of Yokohama’s efforts to concentrate on its more-profitable off-highway tires enterprise space, the Japanese company said.

Tammy Moric, marketing communications coordinator for Trelleborg Wheel Systems Americas Inc., told the Press that Trelleborg Wheel Systems has 14 production sites globally, including the facility in Charles City, with operations in more than 100 countries to help customers with sales, technical support and service.

Production at the Charles City facility is focused on radial agricultural tires, including more than 80 different sizes across three brands. The company has made continuous investments in processes, tools and staff training, allowing it to remain open during the pandemic and continue to support customers and the supply chain, Moric said.

The Charles City facility is ramping up efforts to meet high product demand, with the site currently operating three shifts a day and looking to hire more employees.

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 acquisitions and investments, building a strong and attractive company in the off-highway business, Trelleborg said in a news release.

The acquisition of Trelleborg Wheel Systems will enable Yokohama Rubber Co. to consolidate its position among tire producers in the world, becoming a global leader in the off-highway segment, covering different market needs in the agricultural, construction, material handling, mining and two-wheels market segments with the addition of Trelleborg, Mitas, Maximo, Cultor and Interfit brands to its portfolio, Yokohama said in a press release.

“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,” said Paolo Pompei, president of Trelleborg Wheel Systems.

“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 Co., Ltd. as a strong owner,” Pompei said.

Trelleborg Wheel Systems had gross sales of $1.17 billion in the last 12 months, or roughly a third of Trelleborg gross sales.

Trelleborg Chief Executive Peter Nilsson said the sale will allow the company to accelerate growth in other areas as well as returning additional capital to stockholders.

Yokohama Rubber said the acquisition will contribute to the expansion of its off-highway tires business that accounted for $977 million in sales last year, which YRC sees as a “future growth driver.”

The transaction, which 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 said in separate announcements.

Trelleborg Group’s and Trelleborg Wheel Systems transaction teams will continue to manage the activities of Trelleborg Wheel Systems facilities until the sale is completed, the company said.