Subscribe to enjoy similar stories. Anant Goenka, vice-chairman of RPG Group, recalls a chance meeting with an HSBC banker during a flight from Delhi to Mumbai some six months ago, which sparked the conglomerate's interest in acquiring Michelin's off-highway tyres and tracks business. In the next 4-6 months, Ceat faced a brief process as it had to navigate competing interests from Indian and Chinese tyre manufacturers that were also pursuing Camso.
The company needed to determine its strategy and propose a price, which ultimately led to a deal announcement last week. On Friday, tyre maker and RPG Group company Ceat said that it has entered into a definitive agreement with the French tyre maker Michelin to acquire its Camso brand's off-highway tyres (OHT) and tracking business for $225 million (about ₹1,905 crore). The deal also includes two manufacturing plants in Sri Lanka.
The business comes with very large OEM ( original equipment manufacturer) clients such as JCB and New Case Holland and distributors. Ceat will also have access to high-technology products and Camso’s track business customers. Although Ceat will not have access to the tyres business now, in three years, It will gain access to the Camso brand.
“It is a high-technology product that we now get access to. To that extent, the opportunity is quite high and there are very few players in the tracks segment," Goenka said in an interview with the Mint, a day after the deal was announced. The transaction is expected to close by May or June.
Ceat is funding this deal through internal accruals as well as debt. About 70% of the payout will be through debt. For Michelin, the world's second-largest tyre maker after Japan's Bridgestone, the track's business is in a
. Read more on livemint.com