Recently, Indian tire manufacturer Ceat Ltd announced that it has reached a final agreement with Michelin to acquire Michelin's Camso brand off-highway tires and tracks business in an all-cash transaction with a transaction value of approximately US$225 million.
It is understood that Camso was originally headquartered in Canada. Michelin acquired Camso for $1.36 billion in 2018. At the time, the company had sales of $1 billion. By fiscal 2023, revenue was $213 million.
The transaction is expected to be completed within six to nine months, and Ceat will gain global ownership of the Camso brand along with two manufacturing facilities in Sri Lanka. After a three-year licensing period, global ownership of the Camso brand will also be assigned to CEAT in perpetuity.
Ceat and Camso are highly complementary in terms of positioning and capabilities, Camso has strong brand value and market position in the European and North American markets. Ceat said the move will expand its portfolio in the high-margin off-highway tires (OHT) and track segments, including agriculture tires and tracks, power-sports tracks and materials-handling equipment tires.
Michelin will thus exit from the activities related to compact line bias tires and construction tracks, it will mainly offer its radial technology tires to the construction market and end production of bias tires at its Olsztyn factory in Poland. With the divestment, Michelin said it is continuing to reshape it's 'beyond road' business, in line with the group's sustainable growth strategy.
Over the past decade, Ceat has been building its off-highway tire business and currently has more than 900 products, covering approximately 84% of the category demand in the agricultural sector. Camso will enable CEAT to enter the track and construction tire sectors. Camso's track business is in a technologically leading position in the segment due to the limited number of global players.
More importantly, Camso will give Ceat access to a global customer-base, including over 40 international OEMs and international OHT distributors.
Arnab Banerjee, managing director and CEO of Ceat, said: "The Camso brand is an excellent fit with the growth strategy of Ceat's off-highway tire business, thereby improving our margin profile."
Currently, Ceat has already established a specialty tire company in the US to sell off-highway tires made in India to the North American market. The acquisition of Camso will comprehensively expand Ceat's off-highway tire varieties in the North American market and accelerate its entry into the North American market.
From June to September 2024, Ceat's tire sales revenue increased by 8.2% year-on-year to 33.045 billion rupees; comprehensive profit after tax decreased by 41.5% year-on-year to 1.215 billion rupees.
DLFTECH is a professional equipment marketing & service company built by a senior R&D and marketing team in the tire & conveyor belt equipment industry. Benefiting from the rapid follow up of the international rubber industry's process re-engineering and the demand for industrial intelligence, DLFTECH, the best of the best, has rapidly developed into a new star in the international rubber machinery industry.
If any tire or conveyor belt industry customers need such as tire mold laser cleaning system, OTR bead winding line, tire laser engraving machine, etc., please feel free to contact info@delphygroup.com.
