India's CEAT said on Friday it would buy French tyremaker Michelin's Camso brand for $225 million, as it looks to expand into higher-margin tyres at a time when elevated rubber prices have eaten into its profits.
Camso, a Canadian brand that Michelin acquired in 2018 for $1.45 billion, makes tyres that are fitted into heavy-duty vehicles such as tractors, harvesters and bulldozers.
"The Camso brand is an excellent fit with the growth strategy of CEAT's off-highway tyre business, thereby improving our margin profile," CEAT MD and CEO Arnab Banerjee said.
Indian tyremakers have been struggling with surging prices of rubber, their key raw material.
CEAT missed its September-quarter profit estimates on higher material prices and weak demand due to a drop in car deliveries to dealers in the September quarter.
The company is the third largest Indian tyremaker by sales and competes with MRF and Apollo Tyres, among others, in the domestic market.
CEAT said it will own two manufacturing facilities of Michelin in Sri Lanka following the deal.
