In January, the deal was hinted at, rumored and ultimately rebuffed by Trelleborg A.B.
On April 4, rumors became reality as Trelleborg agreed to sell its Trelleborg Wheel Systems business to Yokohama Rubber Co. Ltd. for $2.3 billion in a cash and debt-free deal.
The deal, which was delayed near the end of the year due to regulatory approval needs, came three months after speculation surfaced that the Japanese tire maker was interested in acquiring the Trelleborg unit, which generated $1.17 billion in revenue last year on the sale of agricultural tires and wheels.
The wheel systems segment, viewed at the time by Trelleborg as being "at the height of its valuation," generated 69 percent of its business in Europe in 2021, followed by North America at 18 percent, Latin America at 6 percent and the rest of the world 7 percent.
It had an earnings before interest and taxes (EBIT) margin of 12 percent on the year, according to data provided by the firms.
Without its tire and wheels business, Trelleborg said it is ready to focus on more lucrative areas of growth.
While Trelleborg ranked as the No. 9 largest global manufacturer of non-tire rubber products with $2.61 billion in 2021 sales, according to Rubber News' latest rankings data, the company ranked No. 33 in tires sales with tire revenue of $765 million.
The company had maintained 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.
Because of the high amount of greenhouse gases emitted during tire manufacturing, the divestment also immediately improved the sustainability rating of the company. That is because the TWS business accounted for 67 percent of the company's overall climate impact, but only 30 percent of sales.