Information on the Target

Kuraray Co., Ltd. has officially announced its decision to divest certain operations from Calgon Carbon Corporation, a subsidiary located in the United States. Acquired by Kuraray in 2018, Calgon Carbon is renowned as the world's largest manufacturer of activated carbon, offering a wide array of products that include bituminous coal-based, wooden, and palm shell-based carbons. Calgon Carbon engages in several applications, focusing on water and air purification as well as various environmental solutions.

This divestiture pertains specifically to Calgon Carbon's operations related to UV-based water treatment and ballast water treatment. As part of a strategic review of its business portfolio, Kuraray has opted to transfer these operations to De Nora Water Technologies LLC, a prominent company in the water treatment sector based in Italy. The transfer is expected to be finalized by the end of June 2021.

Industry Overview in the Target’s Specific Country

The activated carbon industry, particularly in the United States, is characterized by a robust demand driven by the increasing need for environmental protection and compliance with stringent water and air quality regulations. This sector is experiencing growth due to heightened awareness of pollution and a growing emphasis on sustainability practices across various industries.

With the continuous implementation of advanced water treatment technologies, companies like Calgon Carbon are positioned well within the market. The rise in industrial activities and municipal needs for waste management solutions further augment the demand for effective water treatment methods, thereby establishing a promising landscape for growth in the activated carbon sector.

Moreover, the proliferation of contaminants and the need for innovative purification solutions can enhance the operational capabilities of activated carbon manufacturers. Firms are increasingly investing in research and development to broaden their product offerings and improve the efficacy of their water treatment solutions.

In addition, the partnership trends in the industry point toward a cooperative landscape where established firms collaborate with technology providers to enhance their technological prowess. This further strengthens the market's resilience and adaptability to evolving environmental norms.

The Rationale Behind the Deal

The decision to transfer UV- and ballast-related operations to De Nora is grounded in the strategic realignment of Kuraray's business portfolio. By divesting these specific operations, Kuraray aims to consolidate its focus on core competencies and maximize operational efficiencies. De Nora, recognized as a leader in water treatment technologies, is deemed an ideal partner for these specialized operations, potentially leading to enhanced innovation and market competitiveness.

This transaction allows Kuraray to streamline its operations further while providing De Nora with an opportunity to bolster its capabilities in advanced water treatment, thereby positioning both companies for future growth.

Information About the Investor

De Nora Water Technologies LLC, headquartered in Milan, Italy, has established itself as a leader in electrode- and water treatment-related operations since its inception in 1923. The company is known for its innovative solutions that address complex water treatment challenges and has garnered a strong reputation for delivering cutting-edge technologies.

Led by CEO Dr. Mirka Wilderer, De Nora seeks to enhance its technological offerings through strategic acquisitions and collaborations, making this transaction with Calgon Carbon a strategic move that aligns with its long-term growth objectives. The firm’s commitment to sustainability and efficient water management underscores its emphasis on environmental stewardship and innovation in the water treatment industry.

View of Dealert

The sale of Calgon Carbon’s UV and ballast water treatment operations to De Nora represents a significant shift in Kuraray’s focus, aligning its resources more strategically. Industry experts foresee this move as a positive investment for both companies. For De Nora, acquiring these operations amplifies its technological capabilities in water treatment, reinforcing its market position.

Additionally, this divestiture allows Kuraray to sharpen its corporate focus and potentially invest in areas yielding higher returns. By reallocating resources to core business activities, Kuraray can enhance profitability and shareholder value over the long term.

Moreover, as water-related regulations grow stricter globally, the demand for effective treatment solutions is likely to increase. This divestiture not only allows both companies to concentrate on their strengths but also positions them advantageously within a rapidly evolving market landscape.

In conclusion, the deal appears to be strategically sound, promoting operational efficiencies while enhancing both companies’ market capabilities. As the focus on environmental solutions intensifies, this transaction is anticipated to yield substantial benefits for both De Nora and Kuraray moving forward.

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