Ceat completes acquisition of Michelin's Camso construction

Ceat completes acquisition of Michelin's Camso construction

Ceat Ltd. has successfully completed the acquisition of Michelin Group's Camso construction equipment business, including its Sri Lanka-based Midigama plant and Casting Product plant in Kotugoda. The transaction, valued at $225 million, marks a significant milestone for Ceat as it strengthens its global position in the Off-Highway Tyres (OHT) and tracks segment [1].

The acquisition includes the global ownership of the Camso brand, which will be permanently assigned across categories after a three-year licensing period. The deal is expected to further elevate Ceat's global manufacturing and export capabilities, positioning Sri Lanka as a competitive hub for OHT production [1].

In line with its long-term commitment to Sri Lanka, Ceat has signed a Tripartite Memorandum of Understanding (MoU) with Michelin Lanka and the Inter-Company Employees Union (ICEU). This MoU ensures job security for approximately 1,483 employees, guaranteeing full retention of past service, seniority, salaries, and benefits, while safeguarding employment with no retrenchments during the transition [1].

The Board of Investment of Sri Lanka (BOI) has approved the agreement, welcoming Ceat's significant investment. BOI Chairman Arjuna Herath stated, "We welcome CEAT’s significant investment into Sri Lanka, which is among the largest investments from India in recent times. This approval underlines our confidence in CEAT’s vision and will further elevate Sri Lanka’s position as a global manufacturing and export hub" [1].

Amit Tolani, Chief Executive of CEAT Specialty, commented on the agreement, "BOI’s approval for CEAT OHT Lanka marks a new chapter in our partnership with Sri Lanka. With CEAT’s vision of expanding our global off-highway tyre business, we have great plans for this country" [1].

The acquisition is part of a broader trend in the tire industry, with companies increasingly investing in capital spending to expand production capacity. For instance, Bridgestone plans to invest $85 million to increase capacity at its Pune, India, plant by 1.1 million tires annually by 2029, and $180 million to boost capacity for larger-rim-diameter tires at plants in Japan [2]. Similarly, Yokohama Rubber Corp. finalized a $905 million purchase of Goodyear's OTR business, acquiring several plants and assets around the world [2].

References:
[1] https://www.sundaytimes.lk/250831/business-times/ceat-seals-agreement-with-boi-with-171-m-investment-610023.html
[2] https://www.tirebusiness.com/global-tire-report/capex-2024-tire-makers-earmark-13-billion-expand-production