BOSTON – On the heels of steady deal flow in 2014, Bluefield Research has released a new Data Insight, Japanese Player Water Portfolios: Trends & Analysis 2015 that evaluates strategic moves by seven key Japanese trading houses in the private water sector. These firms hold equity positions in utility networks that serve over 15 million people, and plants that operate over 5 million cubic meters per day of desalination, water treatment, and wastewater treatment capacity. Bluefield anticipates that these players will continue their roles as market movers in 2015.
Bluefield’s analysis highlights multiple recent deals that reinforce the importance of Japanese players as equity investors, but also reveals how they employ distinctly different strategies in targeting assets for acquisition. In January 2015, Itochu’s position as a leading GCC region desalination plant investor has increased with the award of the Shuaiba 2 desalination plant expansion in Saudi Arabia (14.9% Itochu, 91,200 cubic meters per day). Mitsubishi has continued to take strategic positions in technology and services firms, including its July 2014 investment in UAE-based Metito (38%) and acquisition of O&M contracts from Australia’s Water Infrastructure Group in December. Marubeni, in contrast, has invested more in utility networks with its June 2014 acquisition of AGS Portugal, giving the firm a foothold in the fast-growing Brazilian market.
Looking forward, 2015 is shaping up as a dynamic year for the private water sector that will present multiple new acquisition opportunities for these Japanese players and others. Brazilian municipalities’ ongoing tendering processes for integrated utility concessions, the sale of GS Inima’s concession assets in multiple markets, and Israel Chemicals’ 50% divestment of IDE Technologies are examples of assets that these firms may evaluate in their ongoing build-out of water asset portfolios — all of which Bluefield Research will be tracking closely through its Insight Services.