CEAT shares jump 12%, hit all-time high as firm acquires Camso's off-highway tyres, tracks business; check details

The stock price rallied as on Friday CEAT said it has entered into a definitive agreement with Michelin to acquire its Camso brand's off-highway tyres (OHT) and tracks business for about ₹225 million (about ₹1,905 crore).

"The acquisition is significant for CEAT in its ambition to become a leading global player in the high-margin OHT segment, as it will give the company access to a global customer base, including over 40 international OEMs and premium international OHT distributors," the company said in a statement.

The transaction, subject to regulatory approvals from relevant authorities, will include the business with revenues of around ₹213 million for CY 2023 and global ownership of the Camso brand, along with two manufacturing facilities, it said.

Camso 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, the company said.

"The Camso brand will be permanently assigned to CEAT across categories after a 3-year licensing period," it said.

This will expand CEAT's product portfolio in the high-margin off-highway tyres (OHT) and tracks segments, which include agriculture tyres and tracks, harvester tyres and tracks, power sports tracks, and material handling tyres, the company said.

Michelin will, following this, exit from the activities related to compact line bias tyres and construction tracks, it stated.

"This acquisition has significant strategic consequences for CEAT as it catalyses the company's journey towards being a leading tyre maker globally," said Anant Goenka, Vice Chairman, RPG Enterprises.

CEAT is owned by RPG Group.

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, as per the company.

Camso will give CEAT the ability to widen its product base into tracks and construction tyres, the company said, adding CEAT brings in the ability for Camso to expand to other segments like agriculture tyres.