Michelin Extends OTR Reach and Buys Camso
Michelin Group is acquiring Camso Inc. for $1.45 billion. The companies will combine their off-the-road tire operations into a new division, which will be based in Magog, Quebec, Canada — Camso's current headquarters. Michelin says the acquisitions makes "the newly created entity the world leader in OTR mobility."
Camso, which reported net sales of $1 billion, has designed, manufactured and marketed OTR products since 1982.
Combining with Michelin, "the new entity will represent more than double the net sales of Camso, supported by 26 plants and approximately 12,000 employees and will benefit from sustainably dynamic markets."
Michelin calls Camso "a market leader" in rubber tracks for farm equipment and snowmobiles, as well as solid and bias tires for material handling equipment. Michelin says Camso is among the "top three players" in the construction market, in track and tire solutions for small heavy equipment.
"Leveraging its technological leadership in tracks and related systems, its competitive manufacturing footprint, particularly in Sri Lanka, and strong customer awareness of its Camsoand Solideal brands, Camso has demonstrated its ability to grow rapidly, expanding at an average pace of 7% per year since 2012."
Michelin says the business will benefit from the expertise of Camso’s management team, as well as Michelin’s long-standing presence in Canada.
In marketing and sales, Michelin says the merger creates a "unique player" in the agricultural market, with a comprehensive range of radial tires and tracks. In the construction market, the two companies reinforce each other's lineups. In the material handling equipment market, Michelin says it will leverage Camso's brands to become "the market leader in solid tires."
The merger will also provide benefits to both Michelin and Camso in technology, research and development, and manufacturing. Camso's strong manufacturing presence in Sri Lanka and Vietnam, noted emerging markets, is of particular interest to Michelin. Jean-Dominique Senard, CEO of Michelin, says, “Michelin and Camso have many values in common. This acquisition is a wonderful mutual opportunity. Michelin will benefit from all of Camso’s skills in the off-the-road mobility markets and Camso from the full range of Michelin’s expertise in the specialty markets.”
Pierre Marcouiller, executive chairman of Camso, says, “Joining up with Michelin’s off-the-road teams is a fantastic opportunity for Camso because of the similarity of our cultures as well as our growth potential. Camso will achieve its ambition to become the global off-the-road market leader and will contribute its dynamic teams, its technical and manufacturing assets and its customer-focused mindset. The transaction has received the backing of all Camso’s shareholders.”
Throughout the discussions between the two companies, Michelin says it has identified "significant opportunities to increase sales and reduce costs, thereby unlocking up to $55 million in synergies by 2021."
As part of the transaction, Michelin has made these promises:
- The OTR division’s decision-making center will be based at Camso’s headquarters in Magog. The management teams, including the top executive, will work out of the Magog office.
- Headcount at Camso headquarters (300 employees, of which 100 are in research and development) will remain stable, and existing R&D operations and production jobs in Quebec will be maintained.
- The new skill sets required to oversee this global business, and the anticipated growth in the division’s net sales, will lead to the creation of new high-quality jobs in the Magog region in the coming years.