Yokohama Rubber to buy Trelleborg Wheel Systems in $2.18 billion deal
STOCKHOLM/TOKYO (Reuters) - Yokohama Rubber Co has agreed to buy Trelleborg Wheel Systems, part of Sweden's Trelleborg AB, 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 = 9.3903 Swedish crowns)
(Reporting by Helena Soderpalm and Mariko Katsumura; Editing by Edmund Blair)
(c) Copyright Thomson Reuters 2022. Click For Restrictions -