ArrowArtboardCreated with Sketch.Title ChevronTitle ChevronEye IconIcon FacebookIcon LinkedinIcon Mail ContactPath LayerIcon MailMenu BurgerPositive ArrowIcon PrintIcon SearchSite TitleTitle ChevronIcon Twitter
Business deals

Japan's Kuraray taking over Calgon Carbon of US for $1.1bn

Tokyo-based chemical maker positioning activated carbon as core segment

Kuraray President Masaaki Ito, left, talks to reporters in Tokyo on Thursday.

TOKYO -- Japanese chemical producer Kuraray is acquiring American activated-carbon titan Calgon Carbon in a deal exceeding $1.1 billion.

Kuraray will purchase all outstanding shares for $21.50 each, according to Thursday's announcement. It aims to close in December and turn the Pennsylvania company, the world's largest maker of activated carbon, into a wholly owned subsidiary.

The highly granular charcoal is used in water treatment and in scrubbing emissions from fossil fuel power plants. Global consumption comes to around 1.6 million tons a year, with sales of high-performance varieties growing at a 5-6% annual clip.

Calgon, strong in activated carbon derived from wood and coal, earned a net profit of some $13 million on sales of about $514 million in 2016. The company has plants in seven countries. Calgon not only sells activated carbon to its roster of international clients, but also offers its wealth of water treatment and other expertise.

Kuraray controls large global shares in such niche products as its trademark Eval plastic film, used for food packaging; industrial alcohols; and Isoprene for cosmetics production. The Japanese group will position activated carbon, another niche operation, as a core segment. Kuraray expects record sales and operating profit in the current year ending December.

Major consolidations are afoot in the global chemical industry, headlined by the recent merger that created DowDuPont. Agrochemical and industrial gas producers are also being acquired, especially in Europe.

Many Japanese chemical companies choose not to pursue scale for scale's sake, instead electing to build up technical competencies in specialized domains. Toray Industries and Mitsubishi Chemical have in recent years made acquisitions to expand their footprints in the carbon fiber sector, while Asahi Kasei has gone the same route with separators for lithium-ion batteries.

Kuraray has adopted the same strategy in niche materials. It will leverage Calgon technology and sales channels to develop water and energy infrastructure markets, especially in emerging economies.

"Activated carbon is often thought of as a stale technology, but it can be fully competitive by offering high added value," Kuraray President Masaaki Ito said at a news conference Thursday. "With water and the environment as strategic areas, we aim for higher reaches."

(Nikkei)

Sponsored Content

About Sponsored Content This content was commissioned by Nikkei's Global Business Bureau.

You have {{numberArticlesLeft}} free article{{numberArticlesLeft-plural}} left this monthThis is your last free article this month

Stay ahead with our exclusives on Asia;
the most dynamic market in the world.

Stay ahead with our exclusives on Asia

Get trusted insights from experts within Asia itself.

Get trusted insights from experts
within Asia itself.

Get Unlimited access

You have {{numberArticlesLeft}} free article{{numberArticlesLeft-plural}} left this month

This is your last free article this month

Stay ahead with our exclusives on Asia; the most
dynamic market in the world
.

Get trusted insights from experts
within Asia itself.

Try 3 months for $9

Offer ends April 19th

Your trial period has expired

You need a subscription to...

  • Read all stories with unlimited access
  • Use our mobile and tablet apps
See all offers and subscribe

Your full access to the Nikkei Asian Review has expired

You need a subscription to:

  • Read all stories with unlimited access
  • Use our mobile and tablet apps
See all offers
NAR on print phone, device, and tablet media