Titan International, Inc. released the following statement.
Morry Taylor, Chairman of the Board, commented, “A few days ago, I released a message on TWI, the market, and our stock. Since that time, multiple sources have reported that Yokohama has offered to buy Trelleborg’s off-highway wheel business for $2 billion. I believe Trelleborg’s wheel business for 2021 will be somewhere around $1.4 billion in sales. Yokohama may face challenges with antitrust laws because of the amount of business their operation in India ships into Europe. Looking at TWI within our Ag business, we are the market leader in steel wheels across all the major markets. Within the Ag tire business, the combined Titan and Goodyear share is number one in South America, North America and Russia. In Europe, we have a long-term plan to be a major player there as well. One thing many people overlook is this — over the past number of years the majority of new Ag wheel and tire designs have come from Titan. I believe that within fifteen years, the largest selling Ag tire will be Titan’s LSW® tire/wheel combination.
“In 2022, Titan anticipates global sales above $2 billion based on our annual plan approved by the Titan Board. Think about that, Yokohama is proposing to buy a business for $2 billion dollars with 2021 sales well below that of Titan’s. Considering the Yokohama/Trelleborg bid, that’s a $2 billion price for a business that could be number one in Europe, but nowhere else. The world’s largest Ag markets are in the U.S. and Brazil and Titan is the leader in those markets. Also, TWI has the manufacturing capacity to expand without building additional facilities. If you apply the same math to the $2 billion price offered for Trelleborg, and reduce it by our net debt, that would suggest a Titan share price above $24.
“It has taken 30 years for the politicians and some of the leaders of the largest companies in the U.S. to realize that chasing low wage countries for manufacturing is going to blow up. Plus, the situation with China has become a big problem across a number of areas. Now customers need to have supply chains for wheels and tires that can support their factories in the countries where they produce or sell their product. I have heard some customers want at least half of their wheels and tires produced in the U.S. There is no other domestic producer who has that kind of capacity beyond Titan.
“I expect that there will be some further positive updates regarding TWI after the first of the year. From myself and all of us at Titan, we hope everyone has a very Merry Christmas and a Happy New Year. Sorry if I offend anyone, but I am too old to be Woke! Cheers!”