Just days after Toyota ran a hackathon in Israel – the first ever tech event being held by a large Japanese corporation in Israel – another Japanese conglomerate is entering into a deal with an Israeli firm. Kurita Water Industries Ltd., Japan’s leading water treatment company in the industrial field, announced that it was acquiring the APW (aluminum, paper chemicals, and water treatment) business units of Israel Chemicals (ICL). The deal is worth €250 million, the companies said.
The sale fits in with both companies’ strategies, they said. Kurita, which is seeking to expand overseas, will acquire the already functioning units of ICL, mostly in Germany, while Israel Chemicals, which has been seeking to reduce its footprint in non-core businesses – in part in order to comply with new laws in Israel requiring that large corporations divest part of their holdings – found a buyer that will help the company with its “Next Step Forward” strategy, launched late last year. The strategy calls for ICL to “divest its non-core businesses to focus on its core operations in the agriculture, food and engineered materials markets and to optimize its positioning in those markets,” ICL said.
The fact that the customer for ICL’s businesses is from Japan is noteworthy. It’s an example of things to come, said Vered Farber, director of the Asian Institute and an expert on Israel-Japan business. “The Japanese finally realized that there is a Silicon Wadi in the Middle East that rivals California’s Silicon Valley, and they don’t want to get left behind,” said Farber. “It took them a while to realize it, but they have finally begun to understand that Israel may have what it takes to keep their economy dynamic and growing.”
Commenting on the acquisition, Kurita President Toshiyuki Nakai said, “Through this transaction, Kurita acquires APW’s diverse product portfolio and broad customer base in Europe, as well as other regions. Combining Kurita’s existing customer base, which is mainly in Japan and the Asia region, with APW’s customer base, will further strengthen Kurita’s overseas business platform. APW’s experienced sales force and long-term relationship with blue chip customers in Europe will support Kurita’s ambition to become a leading global player.”
Eli Glazer, CEO ICL Performance Products Europe & Asia Pacific, added that “in divesting a non-core yet solid business like APW, ICL PP was dedicated to identifying a purchaser that is engaged in similar activities as is APW, that intends to expand APW’s business and that will continue to operate APW’s business at its existing manufacturing sites. We are delighted that Kurita meets all of those criteria. We wish them the best of luck in the future.”