Michelin and Camso came to an agreement whereby Michelin will acquire Camso, meaning that two companies’ off-the-road (OTR) operations will be combined to form a new division to be managed from Quebec.
Led by a set of common values and a strong tradition of innovation and R&D at both Michelin and Camso, and backed by high-quality teams, the strategic partnership makes the newly created entity one of the world leaders in OTR mobility.
Reporting net sales of US$1 billion, Camso has been designing, manufacturing and marketing OTR mobility solutions since 1982. Camso is a market leader in rubber tracks for farm equipment and snowmobiles, and in solid and bias tyres for material handling equipment. It also ranks among the top players in the construction market, in track and tyre solutions for small heavy equipment.
By joining forces with Camso, Michelin will create one of the world’s leading OTR market players, headquartered in Quebec. The business will benefit from the expertise of Camso’s management team and Michelin’s long-standing presence in Canada, both in Laval, Quebec and in Nova Scotia. 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.
On the transaction, Jean-Dominique Senard, Chief Executive Officer of the Michelin group, said: “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.”
“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,” said Pierre Marcouiller, Executive Chairman of Camso. “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.”
As part of the transaction, Michelin has made the following commitments:
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 in R&D) 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 jobs in the Magog region in the coming years.
With this transaction, the Michelin Group is reaffirming its strategic commitment to expanding in tyre and service domains while rolling out its strategy in materials and distribution. Michelin also indicated that, following a thorough analysis, the synergies expected to result from the Fenner acquisition have been revised upward, to £60 million from the initially announced £30 million
Additionally, thanks to the complementary positioning of the two companies’ product and service offerings, the transaction is expected to deliver benefit that cover marketing and sales, technology and manufacturing.
In marketing and sales, the new entity is expected to firstly benefit in the agricultural market, the creation of a unique player providing its customers with a comprehensive range of high quality radial tyres and tracks. Addedly in the construction market, Camso will reinforce Michelin’s offering with its bias tyres and tracks offerings. On top of all this, the material handling equipment market will see Michelin leverage Camso’s renowned SOLIDEAL and CAMSO brands to become the market leader in solid tires.
Furthermore, the transaction expects to see added technological benefits, with the cooperation between Camso and Michelin meaning additional researchers will bolster the Group’s innovation capacity in tracks and airless tyres.
This cross-fertilization of R&D expertise will enable the teams to consolidate the Group’s position as a global technological leader in support of sustainable mobility, as Michelin’s headway in terms of long-lasting performance of tyres is a differentiating factor and a key strength for reducing its environmental footprint.
In addition, Michelin’s technological breakthroughs in reducing soil compaction while maintaining enhanced traction, for example, will contribute to the products that Camso develops.
Finally, the strong manufacturing presence of Camso in emerging markets, particularly in Sri Lanka and Vietnam will be of an added benefit to Michelin moving forward.