MAGOG, Quebec—Some years ago a reporter asked an executive in the rubber industry about a recent acquisition and the synergies he expected from that deal.
His reply? "Interesting word—synergy," he said. "It's like the Yeti," he said.
"Yeti?" I asked, somewhat perplexed.
"Yes," he replied, "because everyone believes in it, but no one's ever seen it."
Michelin, with its pending acquisition of off-road tire/track specialist Camso Group, wants the investment world to believe it's positioned to challenge that supposition.
In presenting the deal to the business community in mid-July, Michelin Chairman Jean-Dominique Senard and CFO Marc Henry repeatedly evoked the "S" word in explaining their company's reasons for striking the Camso deal, as well as the 2018 purchase of conveyor belting producer Fenner Group.
In addition, Senard said he views the Camso deal as a great opportunity to jump into market leadership positions in at least four market categories where up to now Michelin hasn't been active, then leverage his company's strengths in technology and logistics to keep these individual businesses growing at rates above the segment averages.