Trelleborg sells off forklift tire-making unit for $2.3 billion
Yokohama Rubber Co. buys industrial wheel systems division to support forecast that global transportation market is set to shift from personal vehicles to shared mobility model.
The Swedish engineering and manufacturing firm Trelleborg AB will sell off its Trelleborg Wheel Systems division, which makes specialized tires for material handling vehicles and agricultural tractors, in a $2.3 billion deal with Yokohama Rubber Co., the companies said today.
Tokyo-based Yokohama said it made the deal as a forecast that the global tire market is undergoing a shift from consumer applications to commercial ventures, thanks to trends like the rise of Connected, Autonomous, Shared and Electric (CASE) vehicles, mobility as a service (MaaS), and digital transformation (DX).
“The global tire market can be broadly divided into two sub-markets—consumer tires, which includes passenger car tires, and commercial tires, which covers tires used on trucks and buses, agricultural and construction machinery, and other special-purpose vehicles. These two sub-markets currently are similar in scale,” Yokohama said in a release. “However, Yokohama Rubber expect the trends toward CASE, MaaS, and digital transformation (DX) to greatly change the tire market landscape. Specifically, the Company expects individual ownership of cars to decrease and infrastructure-related vehicles devoted to moving people and goods to increase, leading to consumer tires becoming commercial tires.”
Proponents of that vision, such as Toyota Motor Corp., predict that technological advances are already changing the sector, prompting automakers to evolve from simply building cars to operating as "mobility companies" that provide a wide range of services related to transportation.
Yokohama said the acquisition will help it serve that growing market, since Trelleborg Wheel Systems’ product catalog includes sales of 60% for agricultural tires, 20% for industrial, and 20% for construction machinery and motorcycles. For its purchase price, Yokohama will take over the wheel unit’s 14 manufacturing plants in nine countries, including seven in Europe, two in the U.S., one in Brazil, and four in Asia. By geographical market, Trelleborg Wheel Systems draws about 70% of its sales from Europe.
The wheel systems unit recorded $129 million operating profit on $1.1 billion net sales in 2021, employing some 6,750 workers. That represents nearly one-third of its parent company’s $3.6 billion yearly revenue for 2021, generated from a much larger labor force of 21,230 total employees.
Completion of the transaction is subject to the approval of the relevant authorities and is expected to be completed in the latter part of 2022.
This morning Trelleborg Group signed an agreement to divest Trelleborg Wheel Systems to Yokohama Rubber Company, Limited for EUR 2,100 M (SEK ~22,000 M).
— Trelleborg Wheels (@TrelleborgWheel) March 25, 2022
Read the press release here: https://t.co/4uilsed4RD
