Yokohama has made a US$2.3 billion bid to buy the Trelleborg International wheel division

Once the transaction is completed in late 2022 it allows Yokohama to expand its reach into farm tyres and wheels

The Yokohama Rubber Company will become a leading supplier of agricultural tyres and wheels built to order following the purchase of the Trelleborg Group’s Wheel Systems division

The Yokohama Rubber Company has been chipping away with offers since early 2022 and their most recent US$2.307 bid to buy Trelleborg Group’s Wheel Systems division has been accepted with completion in the latter part of 2022.

The purchase is no mean feat as the Trelleborg Group’s annual sales are approximately US3.5 billion and they operate in over 50 countries. The group runs three main business divisions: Trelleborg Industrial Solutions, Trelleborg Sealing Solutions and Trelleborg Wheel Systems.

The Trelleborg Wheel Systems (TWS) division operates in two market segments. The production of tyres and wheels for tractors and other agricultural and forestry vehicles, and production of tyres and wheel products for handling vehicles such as forklifts and construction vehicles.

In 2020, the TWS division produced net sales of almost US1 billion, making up almost a third of the overall Trelleborg Group’s sales, so it was an important division within the Trelleborg Group that has over 6,000 employees worldwide.

Under Trelleborg International’s ownership, during the past few years the Trelleborg Wheel Systems division worldwide has more than doubled in size and in addition substantially increased its profit margin.

Trelleborg International the Swedish tyre and wheel manufacturer grew their Wheel Systems division through some smart acquisitions and then went on to make strategic investments to build a strong market base in the off-highway tyre business.

For the Yokohama Rubber Company, currently the third largest tyre maker in Japan, the acquisition of Trelleborg Wheel Systems has catapulted the company into a leading market position among tyre manufacturers and distributors worldwide.

Up until now Yokohama rubber has specialised in passenger tyres but with the purchase of the Trelleborg Group’s Wheel Systems division the ratio will turn to 2:1 passenger tyres and commercial off-road respectively

Yokohama will now focus on two markets and can modify its sales ratio to 2:1 in favour of consumer tyres and commercial off-road tyres.

The company is planning well ahead to a time when the consumer tyre market is expected to retract, but at the same time commercial off-road is expected to maintain its present momentum.

Yokohama has another ace up its sleeve as it plans to introduce CASE (computer-aided software engineering) in a digital transformation that is expected to revolutionise the market.

With the acquisition of the Trelleborg Wheel Systems division it will give Yokohama immediate access to a blend of the former Trelleborg’s market of 60% of its tyres for agricultural and 40% for industrial and construction machinery and motorcycle tyres.

In terms of manufacturing power, Trelleborg has 14 plants in nine countries. There are seven plants in Europe (Italy, Latvia, Serbia, Slovenia, and three in the Czech Republic), with a further two in the United States, one in Brazil, and four in Asia (two in China and two in Sri Lanka.

Up until now Trelleborg has provided after-sales service for industrial tyres at 82 locations in 21 countries, an element that Yokohama Rubber will use to expand its agricultural tyre reach.

In addition, both Trelleborg and Yokohama Rubber have been working separately to develop a remote system for monitoring tyre air pressure and temperature. Moving forward the two companies can collaborate their efforts to offer a more efficient remote monitoring service.

A final element of this synergy is that 30 of the 60 plus OEMs currently supplied by Trelleborg will become Yokohama Rubber customers. With all the benefits of more efficient manufacturing, sales, quality control and initiatives brought about by this acquisition.

During the second half of 2022 the Trelleborg logo on tractor, and commercial off-road tyres will be replaced by Yokohama

Yokohama is now an undeniable global leader in the off-highway segment, able to supply to many different market segments such as agricultural, construction, material handling, mining and two-wheelers

With the addition of the Trelleborg Wheel Systems division, the Yokohama Rubber Company now controls Trelleborg, Mitas, Maximo, Cultor and Interfit brands within its portfolio.

Paolo Pompei, international president of Trelleborg Wheel Systems, had this to say, “Personally, I am extremely grateful to Trelleborg, which has for over 100 years created one of the most successful off-highway businesses in the world, one that continuously invested in growth and technological leadership.

“At the same time, I am really excited to join a leading rubber company that will keep investing in our future and support our successful onward journey. I am confident that we will continue to flourish with The Yokohama Rubber Co. Ltd. as a strong owner,” Paolo Pompei concluded.

Completion of the international transaction is subject to the approval of the relevant authorities and is expected to be completed in the latter part of 2022. Industry sources indicated Yokohama made a bid on Trelleborg’s Wheel System’s business earlier in 2022 for around US$2 billion dollars, it just took another US$307 million to get the bid across the line.