Tyre maker Ceat, a part of RPG Group, has announced that it has entered into a definitive agreement with French tyre maker Michelin to acquire its Camso brand’s off-the-road-highway tyres (OTR) and tracking business for US$225 million. The acquisition will give Ceat a global customer base, including over 40 international original equipment manufacturers (OEMs) and premium international OTR.
The transaction, subject to regulatory approvals from relevant authorities, will include the business, which had revenues of around US$213 million for CY 2023, global ownership of the Camso brand, and two manufacturing facilities.
Camso, a Canadian brand that Michelin acquired in 2018 for US$1.45 billion, makes tyres fitted into heavy-duty vehicles such as tractors, harvesters and bulldozers. It is a premium brand in construction equipment tyres and tracks with strong equity and market position in the EU and North American aftermarket and OE segments.
After a three-year licensing period, the Camso brand will be permanently assigned to Ceat across categories. The deal will expand Ceat’s product portfolio in the high-margin OTR and tracks segments, which include agriculture tyres and tracks, harvester tyres and tracks, power sports tracks, and material handling tyres.
Ceat is the third largest tyre maker in India by sales and competes with MRF and Apollo Tyres, among others, in the domestic market. Following the deal, Ceat said it would own two Michelin manufacturing facilities in Sri Lanka.
Following the acquisition, Michelin will exit from the activities related to compact line bias tyres and construction tracks. Over the last decade, Ceat has been focusing on building its OTR business, which now consists of 900 product offerings and covers around 84% of the range requirement in the agricultural segment.
Camso will allow Ceat to widen its product base into tracks and construction tyres and expand to other segments such as agriculture tyres. With the acquisition, both brands are said to be highly complementary in their positioning and capabilities.
“Michelin firmly believes that Ceat is the right fit to carry on our bias tyres and tracks for the compact construction equipment business. 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 continues to reshape its Beyond Road business, aligning with the Group’s sustainable growth strategy,” said Nour Bouhassoun, Senior Vice President, Beyond Road Business Line at Michelin.
Indian tyre makers have been struggling with surging prices of rubber, their key raw material and Ceat missed its September-quarter profit estimates on higher material prices and weak demand due to a drop in car deliveries to dealers in the September quarter.