The Yokohama Rubber Co., Ltd., has confirmed today that it has entered into a share purchase agreement with Swedish-based Trelleborg AB to acquire all outstanding Trelleborg Wheel Systems Holding AB shares.
Significant Acquisition for Yokohama Rubber
With Trelleborg’s enterprise value totalling €2,040 million, the acquisition is scheduled to be completed in the latter half of 2022, after the legal process underpinned by the EU and other countries is finalised. The acquisition’s impact on Yokohama Rubber’s consolidated financial results is currently under examination.
As Yokohama Rubber works to implement its Yokohama Transformation 2023 (YX2023) medium-term management plan for the fiscal years 2021–2023, this acquisition sums up the ‘X’ in transformation. By expanding on its growth and exploring new value options, Yokohama aims to produce record results for the Japanese-based company in the 2023 fiscal year.
Yokohama Rubber Focusing on Consumer and Special-Purpose Tyre Markets
Yokohama has explained in its statement that it aims to focus on these two markets while looking to CASE (computer-aided software engineering), MaaS and digital transformation to help revolutionise the market. Yokohama Rubber is focused on the projected drop in consumer tyres in the future, as car ownership drops, followed by the increase in transportation and logistics vehicles to increase, thereby increasing commercial tyres.
With the acquisition of Trelleborg, Yokohama can modify its current ratio of 2:1 in favour of consumer tyres to match the current market appetite, which is finely balanced between consumer and consumer tyres. As Trelleborg is a strong OHT business for commercial tyres, this will significantly strengthen Yokohama Rubber’s visibility in the market. This in part is because Trelleborg, over the past 10 times, has expanded its sales 2.6 times over.
For Trelleborg’s optics, 60% of its tyres are agricultural, with 20% industrial. The remaining 20% revolves around construction, machinery and motorcycle tyres. In terms of positioning and finance, Trelleborg has 14 manufacturing plants in nine countries - 7 in Europe (Italy, Latvia, Serbia, Slovenia, and 3 in the Czech Republic), 2 in the United States, 1 in Brazil, and 4 in Asia (2 in China and 2 in Sri Lanka, with 70% of total sales made in Europe.
Trelleborg also has an extensive lineup of tyres, supporting the full range of vehicles and vehicle sales. This lineup will help Yokohama Rubber have a more complete brand structure, strengthen its service network, boost its sales of OE tyres and broaden its regional sales network.
As Trelleborg has its proprietary tyre maintenance service that provides after-sales service for industrial-use tires at 82 locations in 21 countries, this is an element that Yokohama Rubber can expand to agricultural tires. In the DX area, Trelleborg is working to develop a remote system for monitoring tyre air pressure and temperature. Yokohama Rubber has been developing a similar system, so the two companies can collaborate to bring about a more convenient and efficient remote monitoring service.
A final element of this synergy is that 30 of the 60 plus OEMs currently supplied by Trelleborg will now become new customers for Yokohama Rubber. With the various benefits brought about by this acquisition, manufacturing, sales, quality control and ESG initiatives will significantly expand, develop and improve as a result.