Trelleborg has signed an agreement to acquire ČGS Holding – a privately-owned company with leading positions in agricultural and specialty tires sold under the Mitas, Rubena and Savatech brands, as well as engineered polymer solutions – for £831 million on a cash and debt-free basis.
The combined sales for two companies in the rolling 12-month period ended June 30, 2015, amounted to approximately £2.2 billion, and the combined companies have approximately 23,000 employees.
The transaction is subject to approvals from relevant competition authorities and is expected to be completed in the first half of 2016.
“I am very proud to announce this highly complementary acquisition, which is a significant and attractive add-on to our existing businesses,” the chief executive and president of Trelleborg, Peter Nilsson, said. “ČGS, with its strong and well performing operations in agricultural and industrial tires as well as engineered polymer solutions, will strengthen and complement Trelleborg’s already leading positions in a number of existing areas.”
ČGS spokeswoman Vera Bechynova, meanwhile, said: “Trelleborg is a trustworthy strategic partner possessing a comprehensive vision for the development of ČGS Holding and we are confident that Mitas, Rubena and Savatech rubber manufacturing business will be placed in capable hands.”
With the acquisition of ČGS and its subsidiary Mitas, Trelleborg is establishing itself as a global leader in agricultural tyres and reinforces its leading position in industrial tires. As a result of the acquisition, Trelleborg Wheel Systems will almost double its revenues, broaden its geographical reach and add new positions in complementary tyre niches.
Mitas is performing strongly despite the current downturn in the agricultural market. Moreover, the acquisition of ČGS’s other industrial polymer businesses will enhance Trelleborg’s leading positions in several of the Group’s existing business areas.
“ČGS has a highly complementary manufacturing footprint with competitive production in Central and Eastern Europe, USA and Mexico,” Mr Nilsson added. “The transaction adds to our capabilities, represents a strong strategic fit and is expected to generate synergies.
“The plan is to gradually integrate the acquired entities into Trelleborg’s existing five business areas. We regard the purchase price as attractive given the significant synergy potential and expected turnaround for the agricultural market.”
ČGS employs about 6,500 people, is headquartered in the Czech Republic and has 13 production sites, of which 11 are located in Central and Eastern Europe, one in the US and one in Mexico.
For more information visit: www.trelleborg.com or www.mitas-tyres.com.
