MUMBAI: RPG group tyre company Ceat has sealed a new acquisition. It has entered into an all cash agreement to acquire Michelin’s Camso brand’s off Highway construction bias tyres and track business. The cost of the deal: an estimated $225 million. The Camso brand did business worth $213 million in calendar year 2023 and Ceat is getting its global ownership along with two state-of-the-art manufacturing facilities in Sri Lanka.
Camso is a premium brand in construction equipment tyre and tracks with strong equity and market position in the EU and north American aftermarket and original equipment segments. The brand will be permanently assigned to Ceat across categories after a three-year licensing period, expanding its product portfolio in the high margin off-highway tyres (OHT) and tracks segments, which includes agriculture tyres and tracks, harvester tyres and tracks, power sports tracks and material handling tyres. Michelin will thus exit from the activities related to compact line bias tyres and construction tracks.
The acquisition is a significant milestone for Ceat in its ambition to become a leading global player in the high margin OHT segment. Over the past decade, it has been focusing on building that business, which now consists of 900 plus product offerings and covers around 84 per cent of the range requirement in the agricultural segment. Camso will give Ceat the ability to widen its product base into tracks and construction tyres. More importantly, it will give it access to a global customer base including over 40 international OEMs and premium international OHT distributors. Ceat brings in the ability for Camso to expand to other segments such as agriculture tyres. Both brands are highly complementary in their positioning and capabilities.
The transaction will be subject to regulatory approvals from relevant authorities.
RPG Enterprises vice-chairman Anant Goenka opined that the Camso acquisition is likely to catalyse the company towards becoming a global tyre maker. Said he: “Camso is an industry leading brand in the off-highway tyre market built through many years of investment in creating product superiority and manufacturing excellence, nurtured through the Michelin parentage. Most importantly, we found a great cultural alignment between Camso and Ceat because of our TQM way of working.”
Ceat MD & CEO Arnab Banerjee added that the Camso’s OHT tyres brand fitted excellently with Ceat and will help improving the company’s margin profile. “ Access to the most premium customers, a high-quality brand and a qualified global workforce is what excites us the most about this acquisition. The track segment is a technologically superior segment with a limited number of global players. We also found high synergies between the two brands, Ceat and Camso, and are confident that both will benefit tremendously from their complementary capabilities and positioning..” he said.
Michelin senior vice president beyond road business Line, Nour Bouhassoun said: “Michelin firmly believes that Ceat is the right fit to carry on our bias tyres and tracks for compact construction equipment business. Both our companies are fully committed to ensuring a smooth transition for our employees and business continuity for our customers and suppliers. With this operation, Michelin is continuing to reshape its beyond road business, in line with the group's sustainable growth strategy.”
