Yokohama Rubber to buy Trelleborg Wheel Systems in $2.18 bln deal (updated)

Yokohama Rubber Co

25/03/2022 09:25

(Adds detail, shares)
    STOCKHOLM/TOKYO, March 25 (Reuters) - Yokohama Rubber Co
 5101.T  has agreed to buy Trelleborg Wheel Systems, part of
Sweden's Trelleborg AB  TRELb.ST , for 265.2 billion yen ($2.18
billion), the two companies said on Friday.
    The acquisition of Trelleborg Wheel Systems, which makes
tyres for agricultural and industrial machinery, is part of the
Japanese company's move to focus on its more-profitable
off-highway tyres (OHT) business area.
    Shares in Trelleborg, which said it estimated a capital gain
of 6 billion Swedish crowns ($639 million), rose 22% in early
trading, on track for its best day ever.
    Trelleborg Wheel Systems had net sales of 10 billion crowns
last year, or roughly a third of Trelleborg sales, and had an
earnings before interest and taxes (EBIT) operating margin of
12%.
    "We further strengthen our capacity to accelerate growth
both organically and through acquisitions as well as returning
additional capital to shareholders," Trelleborg Chief Executive
Peter Nilsson said in a statement.
    In light of the transaction, he said the company's financial
targets would be communicated later, without giving a date.
    The acquisition is scheduled to be completed in the second
half of 2022, after meeting regulatory requirements in the
European Union and other countries, Yokohama Rubber said.
    
    ($1=121.8600 yen)
    ($1 = 9.3903 Swedish crowns)

 (Reporting by Helena Soderpalm and Mariko Katsumura; Editing by
Edmund Blair)
 ((Mariko.Katsumura@thomsonreuters.com;))