CEAT soared 10.75% to Rs 3424.40 after RPG group company has entered into definitive agreement with associate companies of the Michelin Group (Michelin) to acquire Camso brand's Off-Highway construction equipment tyre and tracks business.
Camso is a premium brand in construction equipment tyre and tracks with strong equity in EU and North American aftermarket and OE segments.The transaction is expected to expand companys product portfolio in the Off-Highway Tyres (OHT) and tracks segments, which includes agriculture tyres and tracks, harvester tyres and tracks, power sports tracks and material handling tyres. The business has two manufacturing facilities located in Sri Lanka. Its revenue was $213 million for CY 2023.
The Camso brand will be permanently assigned to CEAT across categories after a 3-year licensing period.
It will give CEAT access to a global customer base including over 40 international OEMs and premium international OHT distributors. CEAT brings in the ability for Camso to expand to other segments such as agriculture tyres. Both brands are highly complementary in their positioning and capabilities.
It is expected that the transaction will be completed tentatively within 6-9 months, or such period as may be mutually agreed, subject to satisfaction of closing conditions. The proposed transaction is for a consideration of about $225 million, subject to customary adjustments and applicable taxes.
The tyres manufacturing companys consolidated net profit fell 41.4% to Rs 121.88 crore in Q2 FY25 as compared to Rs 208 crore posted in Q2 FY24. Revenue from operations increased 8.22% year on year (YoY) to Rs 3,304.53 crore in the quarter ended 30 September 2024.
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CEAT, the flagship company of RPG Enterprises, is one of India's leading tyre manufacturers and has a strong presence in global markets. CEAT produces more than 41 million high-performance tyres, catering to various segments like 2-3 wheelers, passenger and utility vehicles, commercial vehicles and off-highway vehicles.
The counter hit all-time high at Rs 3,449.40 in intraday today.
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