Acquiring BK Giulini’s water-treatment chemicals, and the run of Western deals (2015)

What money could buy, and what it could not

Filing the run of acquisitions under the globalization of the water business misses what kind of decision it was. What Kurita had long observed was a modest overseas policy under which subsidiaries invested only what they themselves earned; paying ¥32.3 billion at a stroke to take on a European business — its people and its sites together — is the exact opposite of that. The core of the decision lies here: a company that had sharpened its technology by getting inside its domestic customers’ plants switched to securing, first of all with capital, the customers it meant to get close to.

What capital bought, however, reached only as far as the customer base and the production sites. Selling European chemicals in Japan stalled in evaluation testing and regulatory review; in North America the post-acquisition integration did not run as planned, and the year to March 2023 saw ¥7.6 billion of goodwill written off at Kurita America’s water-treatment chemicals business. The work of making the assembled businesses operate as one company was left behind as a task for the European and North American regional organizations. An acquisition may buy time, but it cannot buy the time that integration itself requires.