Michelin acquires Camso to become the leader in off-road mobility
Yesterday during market, Michelin confirmed that it is acquiring the Canadian off-road tires supplier Camso for a total EV of EUR1.4bn, the main objective being to reinforce its position within the off-road business. Post synergies, this acquisition should be accretive for group’s EBIT margin. Management took the opportunity to announce the doubling of the synergies linked to the Fenner acquisition. We revise up our estimates to integrate all new elements, leading to a 4% upward revision on our 2019e EPS. Our FV is also up from EUR142/sh to EUR146/sh. We confirm the Buy rating on Michelin which with, the Fenner and Camso’s acquisitions, aims to become a more industrial group, thus spurring margins. Positive.Compagnie Generale des Etablissements Michelin is active in the tire and mobility-related service markets. Co. manufactures, distributes and sells tires for all kinds of vehicles, publishes maps and guides and operates a number of services. Co.'s operates in three segments: Passenger car/Light truck tires and related distribution; Truck tires and related distribution and Specialty businesses segment including tires for specialty vehicles and maps and guides. Co. distributes its products through two tire distribution networks: Euromaster (Europe) and TCI (U.S.A.) and its brands include Michelin, BFGoodrich, Kleber, Uniroyal, Warrior, Kormoran, Riken, Taurus and Tigar.
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