TOKYO -- Taiyo Nippon Sanso, Japan's leading producer of industrial gases, will purchase Illinois-based Continental Carbonic Products, in a bid to tap into the growing carbon dioxide market in the U.S.
Taiyo Nippon Sanso will pay $234 million to acquire a 100% stake in the company from the founder and his family.
Continental Carbonic controls roughly 5% of the U.S. market for industrial carbon dioxide and boasts expertise in the production of dry ice. The company's sales is estimated $115 million in the business year ended December 2013. With the move, Taiyo Nippon Sanso's U.S. business, which already sells industrial gases including oxygen and nitrogen, will enter the country's carbon dioxide market.
The U.S. market for carbon dioxide came to about 9.8 million tons in 2012, and demand is expected to rise for such uses as welding in automobile manufacturing. Over 60% of the gas is used for foods, mostly in the form of dry ice, while just over 20% is used for such purposes as welding. Carbon dioxide is created as a byproduct at chemical factories, then collected and compressed.
Taiyo Nippon Sanso, ranked the No. 5 producer of industrial gases globally, rakes in sales of over 500 billion yen ($4.83 billion). Recently, the firm has been working to expand its U.S. business, and is building facilities for producing such products as nitrogen for use in the extraction of shale gas.
Last year, the company raised over 30 billion yen through the sale of newly issued shares to Mitsubishi Chemical Holdings, and has been considering overseas acquisitions.