HIRATSUKA, Japan—It's official: Yokohama Rubber Co. Ltd. completed its acquisition of Trelleborg Wheel Systems.
Yokohama said the company, which was acquired for $2.3 billion in a cash and debt-free basis, will operate as a new company, Yokohama TWS, and won't change its organizational structure.
Paolo Pompei, former president of Trelleborg Wheel Systems, will retain the same title as head of Yokohama TWS.
"Today we are closing a successful chapter in our history with the Trelleborg Group and opening a new page with a leading player in the tire industry, sharing our values and vision for the future," he said.
The final regulatory approval came in late March when the United Kingdom's Competition and Market Authority approved the deal.
Trelleborg agreed in March 2022 to sell TWS to Yokohama Rubber. The transaction in effect doubles the size of Yokohama Rubber's off-highway tire business.
Masataka Yamaishi, Yokohama Rubber president and chairman of the board, said the acquisition fits perfectly with the firm's medium-term management plan.
"TWS's wide range of products and brand portfolio, global sales and manufacturing footprint, service scheme, leading technology and skilled people will enable us to consolidate our position among the top tire producers in the world, moving up in the rankings of the world's largest tire producers."
The addition of Trelleborg Wheel's revenue likely will put Yokohama in a position to challenge Pirelli & C. S.p.A. and Hankook Tire & Technology Co. Ltd. for No. 6 on the table of the world's leading tire makers, according to Tire Business calculations.
YRC was ranked No. 8 last year on the basis of $5.26 billion in fiscal 2021 tire sales.
Hiratsuka-based Yokohama employs more than 28,000 around the globe, operating in more than 120 countries. It generated $6.65 billion in revenue last year, according to the company, including $5.74 billion in tire-related sales.
Yokohama TWS produces products for the agriculture, construction, material handling and two-wheel markets.
The acquisition bolsters Yokohama's presence in Europe, which accounts for almost 70 percent of Trelleborg Wheel Systems sales. Aside from North America, the region was the second largest for TWS, accounting for 20 percent of sales.
Yokohama said the acquisition will bring the ratio of consumer tire to commercial tire sales composition in line with the global tire market ratio of 1:1, from the current 2:1 ratio weighted toward consumer tires.
Yokohama also said the move will lead to further growth of Yokohama Rubber's OHT business "through synergies generated by the combined strengths of both companies in all areas, from the development of new products and services to manufacturing, sales, quality control and sustainability."
In 2022, Trelleborg Wheel Systems generated sales of more $1.3 billion and employed more than 6,600 in 42 countries.
"Over the last few years, we have delivered continuous business growth combining strategic acquisitions with dedicated investments, and this has allowed us to build a strong and sustainable platform supported by a global manufacturing footprint, innovative products and solutions and an extensive sales network in close proximity to our customers," Pompei said.
"I'm extremely proud of what the TWS team has been able to achieve so far, and we are all honored that Yokohama has decided to invest in us, building together with their existing business, a new leading player in the off-highway segment."
Yokohama said the acquisition enables it "to consolidate its leading position among tire producers in the world, becoming a global leader in the off-highway tires segment with the addition of Trelleborg, Mitas, Maximo, Cultor brands and Interfit service network to its portfolio."
Trelleborg operates 10 tire plants in seven countries on three continents—China, Czech Republic, India, Italy, Serbia, Sri Lanka and the U.S.—and four wheel plants in four nations.
Trelleborg's largest European tire plant is in Serbia, where it has capacity for around 25,000 tires per day.
In the U.S., TWS operates tire plants in Spartanburg, N.C., and Charles City, Iowa, producing farm tires. Together they employ over 375. Production capacity in Charles City is listed as 13,500 tons per year; TWS does not disclose the Spartanburg plant's capacity.
Rubber News wants to hear from its readers. If you want to express your opinion on a story or issue, email your letter to Editor Bruce Meyer at [email protected].