Trelleborg: U.K. investigation of TWS deal ‘normal procedure'

LONDON—The United Kingdom's Competition and Market Authority has launched an investigation into the 2022 agreement between Trelleborg A.B. and Yokohama Rubber Co. Ltd. that would result in the Japan-based firm acquiring Trelleborg Wheel Systems.

According to a statement issued by CMA, the investigation is intended to evaluate the impact of the $2.3 billion deal, particularly as it relates to competition within the market.

"The CMA is considering whether it is or may be the case that this transaction, if carried into effect, will result in the creation of a relevant merger situation under the merger provisions of the Enterprise Act 2002 and, if so, whether the creation of that situation may be expected to result in a substantial lessening of competition within any market or markets in the United Kingdom for goods or services," CMA said in a Jan. 31 statement.

Trelleborg, meanwhile, said the investigation is part of a "normal procedure" and should not derail the sale of TWS.

"This is normal procedure," Trelleborg said in its own statement to European Rubber Journal. "The buyer (in this case Yokohama) files (application) and then the authorities start their reviews."

Trelleborg went on to note that it has assessed the deal thoroughly with Yokohama and that "there are no reasons why this deal should not be approved."

The Swedish firm also said that the deal already has obtained clearances from 70 countries and in large markets, including the U.S.

Only approvals from the European Union and U.K. are outstanding, Trelleborg said.

Trelleborg Wheel Systems operates 14 plants worldwide, including seven in Europe, three of which are located in the Czech Republic, according to Yokohama. Those three Czech sites, which manufacture the company's Mitas-brand products, employ about 2,300 and have a total capacity of around 89,000 units per year, according to Rubber News' most recent Global Tire data.

Other Trelleborg-owned European plants are located in Latvia, Serbia, Slovenia and Italy. Trelleborg's largest European tire plant is in Serbia, where it has capacity for around 25,000 tires per day.

Europe, Yokohama said, accounts for almost 70 percent of Trelleborg Wheel Systems sales. Its second largest region—North America—accounts for about 20 percent of sales.

Interested parties in the U.K. have been invited to provide comments on the transaction by Feb. 14.

The statutory deadline for CMA's decision is March 28.

Trelleborg and Yokohama each announced the $2.3 billion deal for TWS in March 2022. The agreement came just about three months after rumors of the potential sale surfaced in late 2021.

European Rubber Journal contributed to this report.