Following its acquisition of Camso, Michelin plans to create a global off-the-road (OTR) tire hub in Magog, Quebec.
On Thursday, July 12, Michelin announced it has signed an agreement to acquire 100 per cent of Camso, and all of its subsidiaries, for US$1.45 billion.
Merging Camso with Michelin’s OTR segment will create the world’s largest player in the off the road tire market.
For Camso, which is based in Magog, the acquisition fulfills a company goal since it began manufacturing OTR tires in 1982.
“The objective has always been the same; we wanted to be No. 1 in this off-the-road market. This was a crazy dream in the past,” Pierre Marcouiller, executive chairman of the board of directors of Camso Inc. said during a press conference held in Magog. “The only thing that was missing in our recipe is what Michelin is bringing to us.”
Camso is a designer, manufacturer and distributor of off-highway tires, wheels, rubber tracks and undercarriage systems for the material handling, construction, agricultural and power sports industries.
The company employs more than 7,500 employees and controls about 11 per cent of the global off the road tire market with net sales of about US$1 billion.
The new entity will represent more than double the net sales of Camso, supported by 26 plants and about 12,000 employees.
“We want to continue the development of this company in a region we very much love and enjoy,” Marcouiller said. “We want to make sure people can continue developing themselves with the opportunities offered by Michelin.”
Jean-Dominique Senard, chief executive officer of the France-based Michelin Group, didn’t mince words when saying Camso, and its employees, will have the opportunity to continue their roles in the new OTR business.
“I have to confirm it, clearly this will happen,” Senard said during the press conference. “The headquarters of this global business will be here. We are incredibly keen in having this organization settled as fast as possible.”
As part of the acquisition agreement, Michelin has committed to situate the OTR division’s decision-making centre at Camso’s headquarters in Magog. The management teams, including the top executive, will work out of the Magog office. As well, the 300 employees at Camso’s headquarters will remain stable, and existing R&D operations and production jobs in Quebec will be maintained.
New positions are also anticipated. The new skill sets required to oversee the 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.
“We don’t want to cut jobs. We want to improve the situation,” Senard said. “When you are managing such a big division, we want to improve the job situation and, if we can, contribute to that as much as possible. This is what we would like to do.”
The new business will benefit from the expertise of Camso’s management team and Michelin’s 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 about 12,000 employees and will benefit from dynamic markets.
In marketing and sales, the combination for the two companies will create a “unique player” in the agricultural market by providing a comprehensive range of premium radial tires and tracks.
In the construction market, Camso will reinforce Michelin’s offering with its bias tires and tracks offers. For material handling equipment, Michelin will leverage Camso’s Solideal and Camso brands to become the market leader in solid tires.
“It seems this is our common destiny on common markets towards common customers as well,” Senard said. “This can only lead to favourable conditions for Camso. This is also true for Michelin Group. Through this operation we are going to complete, in a harmonious way, the overall services and products that Michelin offers around the world.”