CEAT, a prominent RPG Group company, has entered into a definitive agreement with Michelin to acquire the Camso brand’s Off-Highway construction equipment bias tyre and tracks business. The all-cash deal, valued at approximately $225 million, marks a strategic milestone for CEAT as it expands its footprint in the high-margin Off-Highway Tyre (OHT) segment.
The acquisition includes Camso’s business operations, which reported revenues of around $213 million for calendar year 2023, and the global ownership of the Camso brand. Additionally, two state-of-the-art manufacturing facilities located in Sri Lanka are part of the transaction.
Camso: A Strategic Asset for CEAT
Camso, known for its premium standing in the construction equipment tyre and tracks market, has established a robust presence in European and North American aftermarket and original equipment (OE) segments. Following a three-year licensing period, CEAT will gain permanent rights to the Camso brand across categories.
With this acquisition, CEAT will enhance its product portfolio by integrating high-margin offerings such as agriculture tyres and tracks, harvester tyres and tracks, power sports tracks, and material handling tyres. The move also positions Michelin to exit activities related to Compact Line bias tyres and Construction tracks.
A Milestone for CEAT’s Global Ambitions
CEAT views this acquisition as a pivotal step toward becoming a global leader in the OHT sector. Over the past decade, the company has steadily expanded its OHT business, now offering over 900 products that meet approximately 84% of agricultural segment requirements. Camso’s addition will further strengthen CEAT’s capabilities by diversifying into the construction tyre and track categories.
“This acquisition is a significant milestone for CEAT in its ambition to become a leading global player in the high-margin OHT segment,” the company stated in a filing. “Camso will allow CEAT to widen its product base, access a global customer network of over 40 international OEMs, and collaborate with premium OHT distributors.”
Synergies Between CEAT and Camso
Arnab Banerjee, Managing Director and CEO of CEAT, expressed optimism about the synergies between the two brands. “The Camso brand is an excellent fit with CEAT’s growth strategy in the OHT business, thereby improving our margin profile. Access to premium customers, a high-quality brand, and a qualified global workforce excites us about this acquisition. The track segment is technologically superior, with a limited number of global players. We believe both CEAT and Camso will benefit tremendously from their complementary capabilities and positioning,” Banerjee said.
The deal not only provides CEAT with a premium brand but also enhances its technological edge in the track segment, which is characterized by its limited competition and high specialization.
Strengthening Global Presence
The acquisition will bolster CEAT’s global presence, particularly in Europe and North America, by leveraging Camso’s established market equity. With access to Camso’s premium international clientele and distributors, CEAT is well-positioned to capitalize on growth opportunities in the high-demand OHT market.
Manufacturing Facilities in Sri Lanka
The two manufacturing facilities in Sri Lanka acquired through this transaction are expected to play a crucial role in supporting CEAT’s global ambitions. These facilities are equipped with advanced technologies and are integral to the production of Camso’s premium product lines.
Looking Ahead
This acquisition signals CEAT’s commitment to innovation and market expansion in the high-margin OHT segment. By combining CEAT’s extensive product range and Camso’s premium brand value, the company aims to create a global powerhouse in off-highway tyres and tracks, driving future growth in the sector.
With the integration of Camso’s advanced capabilities and a shared vision for excellence, CEAT is set to strengthen its competitive edge in the global OHT market while delivering value to its customers and stakeholders.
