Colombo, December 6, 2024: CEAT, an RPG company and Michelin, the global leader in tyres, announced today that they have entered into a definitive agreement for CEAT to acquire Camso brand’s Off-Highway construction equipment bias tyre and tracks business from Michelin in an all-cash deal valued at about $225 Mn (SLR 65 Bn). The transaction will include the business with revenues of around $213 Mn (SLR 62 Bn) in CY 2023 and global ownership of the Camso brand along with two state-of-the-art manufacturing facilities.
Camso is a premium brand in construction equipment tyre and tracks with strong equity in EU and North American aftermarket and OE segments. The Camso brand will be permanently assigned to CEAT across categories after a 3-year licensing period. This will expand CEAT’s 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 tyres and material handling tyres. Michelin will thus exit from the activities related to Compact Line bias tyres and Construction tracks.
CEAT has been investing in Sri Lanka for more than three decades and manufactures over half of the country’s tyre requirements. CEAT’s joint venture in Sri Lanka with Kelani Tyres PLC, since 1998, is the market leader in truck tyres and commands a significant share of the passenger car tyre market as well as two-wheeler tyre market. CEAT is committed to grow its investments in Sri Lanka and remains steadfast in its role as a responsible participant in the nation’s economic activity and growth. This acquisition paves the way for enhancing valuable foreign exchange earnings in Sri Lanka besides contributing to employment opportunities both direct and indirect.
The acquisition is also a significant milestone for CEAT in its ambition to become a leading global player in the high margin OHT segment. Over the last decade, CEAT has been focusing on building its OHT business, which now consists of 900+ product offerings and covers around 84% 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 CEAT 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.
Both CEAT and Michelin are committed to a coordinated and smooth transition for customers, suppliers and all employees.
The transaction will be subject to regulatory approvals from relevant authorities.
Arnab Banerjee, MD & CEO, CEAT, said: ““The Camso brand is an excellent fit with the growth strategy of CEAT’s Off-Highway Tyre business, thereby improving our 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. We have the benefit of more than 30 years of manufacturing experience in Sri Lanka and we look forward to welcoming all employees and other stakeholders of Camso.”
Nour Bouhassoun, Senior Vice President, Beyond Road Business Line at Michelin, 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.”
