Kurita Water Industries Ltd. of Japan has bought Israel Chemicals Ltd. (TASE: ICL, NYSE: ICL) Performance Products segment's aluminium, paper and water (APW) business units based in Ludwigshafen and Dusseldorf, as well as at additional venues in Europe and China.
Kurita is paying approximately €250 million. The closing of the transaction is expected to occur at the end of 2014, subject to the completion of certain conditions precedent, including receipt of approvals by authorities, as well as the agreement of a minimum number of APW employees to become employees of Kurita.
The APW business units produce active ingredients, formulations and customized water treatment solutions for use by industries and municipalities. The agreement includes Kurita's purchase of Israel Chemicals Performance Products' chemical additives business for the paper industry and related aluminium compounds produced by Israel Chemicals Performance Products at its facilities in Ludwigshafen and Dusseldorf, as well as at additional ICL PP venues in Europe and China.
According to the companies' announcement, the purchase of the APW business is in line with Kurita's growth strategy. The combination of Israel Chemicals' Water Solutions business with Kurita's water technologies will help Kurita develop a more advanced platform to collectively build a global footprint. The Paper Solutions business will accelerate Kurita's expansion of its product offering into new markets through existing relationships. The Alumina Compounds business's technologies for inorganic coagulant, together with Kurita's sensing technologies, will enable Kurita to provide optimal solutions for alumina coagulant to new and existing customers.
Israel Chemicals says that the sale of the APW business units is part of its 'Next Step Forward' strategy launched in late 2013, which calls for the company to divest its non-core businesses to focus on its core businesses in the agriculture, food and engineered materials markets and to optimize its positioning in those markets. The products manufactured by the APW businesses sold to Kurita were not based on Israel Chemicals' core minerals.
Israel Chemicals president & CEO Stefan Borgas said, "ICL is executing its strategy by focusing on its core business, and it will use the proceeds from the sale of APW, as well as from the divestment of additional non-core assets, to strengthen ICL's core businesses in the agriculture, food and engineered materials markets, pursue operational excellence, build out ICL's distinctive mineral assets and technologies, and expand our global presence, especially in emerging markets. We are gratified to enter into an agreement to sell our APW business units to a highly suitable company such as Kurita. This transaction is opportune not only for ICL and Kurita, but also for APW's dedicated and talented team of employees."
Published by Globes [online], Israel business news - www.globes-online.com - on October 27, 2014
© Copyright of Globes Publisher Itonut (1983) Ltd. 2014