The best mergers and acquisitions come when both parties feel they have achieved their goals, bringing about the elusive "win-win" scenario hailed in business speak.
Assuming Yokohama Rubber Co. Ltd.'s $2.3 billion acquisition of Trelleborg A.B.'s tire and wheel business closes on schedule at some point over the next three to six months, that deal has the potential to be such a purchase.
When assessing the Trelleborg Wheel Systems business, it was clear the two companies were viewing the asset from totally different perspectives. Neither side was necessarily wrong in their assessment, mind you, they just come from two firms with differing objectives going forward.
Trelleborg looked at TWS as a business unit that didn't perform at the financial level of the group as a whole. The tire and wheel business, with $1.17 billion in 2021 sales, accounted for 30 percent of revenues, but just 22 percent of EBIT.
Company officials also felt that TWS cluttered the portfolio of the Swedish company. They painted a post-transaction picture of a streamlined Trelleborg with a more coherent business lineup that the financial community could better understand, with similar business models and drivers.
It promises a more profitable firm overall, one that will be in a net cash position that will allow for growth through increased capital expenditures and targeted acquisitions aimed at bolstering its remaining Trelleborg Sealing Solutions and Trelleborg Industrial Solutions businesses.