CEAT Enters Agreement with Michelin to Acquire Camso Off-Highway Tyres Business for USD 225 Million

CEAT, a tyre manufacturer under the RPG Group, has announced a definitive agreement with Michelin to acquire its Camso brand's off-highway tyres (OHT) and tracks business. The deal is valued at approximately USD 225 million (Rs 1,905 crore). This acquisition aligns with CEAT's goal to become a prominent global player in the high-margin OHT sector by gaining access to an international customer base, including over 40 global OEMs and premium distributors.

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Strategic Expansion in Off-Highway Tyres

The transaction, pending regulatory approvals, will include Camso's business with revenues of about USD 213 million for the calendar year 2023. It also involves acquiring global ownership of the Camso brand and two manufacturing facilities located in Sri Lanka. CEAT will permanently own the Camso brand across various categories after a three-year licensing period. This move will enhance CEAT's product range in the high-margin OHT and tracks segments, covering agriculture tyres, harvester tyres, power sports tracks, and material handling tyres.

Camso is recognised as a premium brand in construction equipment tyres and tracks, holding a strong market position in Europe and North America's aftermarket and original equipment segments. Michelin will exit activities related to compact line bias tyres and construction tracks following this transaction. Anant Goenka, Vice-Chairman of RPG Enterprises, stated that this acquisition significantly advances CEAT's journey towards becoming a leading global tyre manufacturer.

Complementary Brand Synergies

Over the past decade, CEAT has concentrated on expanding its OHT business, which now includes over 900 products and covers approximately 84% of the agricultural segment's range requirements. The acquisition of Camso will allow CEAT to broaden its product offerings into tracks and construction tyres. CEAT also brings the capability for Camso to expand into other segments like agriculture tyres. Both brands complement each other well in terms of positioning and capabilities.

Michelin believes that CEAT is well-suited to continue its bias tyres and tracks for compact construction equipment. Both companies are committed to ensuring a seamless transition for employees, customers, and suppliers. Nour Bouhassoun, Senior Vice President of Michelin's Beyond Road Business Line, mentioned that this operation aligns with Michelin's sustainable growth strategy by reshaping its Beyond Road business.

Smooth Transition Commitment

CEAT Managing Director and CEO Arnab Banerjee highlighted that the track segment is technologically advanced with limited global players. He expressed confidence in the synergies between CEAT and Camso, expecting both brands to benefit from their complementary strengths. Both companies are dedicated to coordinating a smooth transition for all stakeholders involved.

Michelin confirmed that the sale of its two manufacturing facilities in Sri Lanka would not lead to any layoffs. The two companies are committed to working together to ensure a smooth transition for all employees, customers, and suppliers. Michelin is selling its Midigama tyre division and casting product division plants that produce bias tires and tracks for compact construction equipment to CEAT.

Michelin and CEAT have agreed not to implement any layoffs at either plant. They will collaborate on appropriate measures for all 1,587 employees at these facilities and related support functions, ensuring a seamless handover between the two companies.