5 M&A Deals That Will Drive Consolidation in Global Tire Market

These are exciting times for the global tire market. There is a flurry of mergers and acquisitions (M&As) taking place across the world and tire companies are leaving no stone unturned in making sure that they stay ahead of the curve.

M&As that will redefine the global tire market industry

Tire major Yokohama Rubber, for instance, recently bought farm and Off The Road (OTR) tire maker Alliance Tire Group B.V. in a deal worth USD 1.1 billion. Through this acquisition, Yokohama Rubber took control of two tire factories in Israel and India. ATG had reported sales at USD 529 million in fiscal year with operating profit to the tune of USD 95 million.

In another deal, Cooper Tire & Rubber Co. acquired 65 per cent stake in China based Qingdao Ge Rui Da Rubber Co. Ltd. The deal is estimated at USD 93 million, as per media reports.  Qingdao Ge Rui Da manufactures radial truck and bus tires and its supply chain is spread across the world. The company has a million sq ft plant in Pindu, Qindao Province in China.

As the third major deal in the Global tire market, Salvadori S.r.l., an Italian supplier of tire, retread and industrial rubber repair products, was recently acquired by Technical Rubber Co. Inc. which is a tire repair materials producer. This will enable Technical Rubber to foray into rubber recycling domain.

What’s more?

Furthermore, tire bellwether Michelin has recently bought Levorin Pneus e Camaras, a Brazilian manufacturer of bicycle and motorcycle tires, for an undisclosed sum. In 2015, Levorin generated sales of $155 million. The company employs more than 2,000 employees and its plants are located in Sao Paulo and Manaus, Brazil.

This exciting phase of mergers and acquisitions further continues with tire major Trelleborg taking over CGS Holding.  This deal will reinforce Trelleborg’s leadership in agricultural and industrial tire market.

What is Europe OTR Tire Market Size?

As per TechSci Research Report titled “Europe OTR Tire Market By Vehicle Type (Mining, Construction & Industrial Equipment; Agriculture Vehicles; and Others), By Country, Competition Forecast and Opportunities, 2022”, the Europe and CIS tire market was pegged at USD 2.85 billion in 2016.

The report forecast a compounded annual growth rate (CAGR) of around 7 per cent for the Europe OTR tire market for the next five years – that means, the market will cross USD 4.21 billion size by 2022.

What is driving this growth?

The research inferences drawn by TechSci Research conclude that it is due to the growing construction and agriculture activities that are fuelling growth in Europe OTR tire market. These factors directly link back to the sales of OTR tires in this region, and even otherwise across the world.

Continental Aktiengesellschaft, Compagnie Générale des Établissements Michelin, Bridgestone Corporation, The Yokohama Rubber Co., Ltd, Sumitomo Rubber Industries, Ltd, Toyo Tire & Rubber Company, Hangzhou Zhongce Rubber Co. Ltd. and Triangle Tyre Co. Ltd, CEAT Limited, are among the major tire companies in the Euro region.

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