US water treatment juggernaut Culligan eyes Chungho Nais stake

Culligan, the biggest water treatment company in the United States, is set to become a major shareholder in South Korean water purifier rental firm Chungho Nais Co. 

Chungho is the fourth-largest player in Korea’s water purifier market. It also manufactures air purifiers and bidets.

The Korean company is currently in negotiations with Culligan over a possible sale of shares, not barring the possibility of Culligan becoming its largest shareholder, those familiar with the development told The Korea Economic Daily.

Culligan is now conducting due diligence on Chungho. 

The corporate value of Chungho stands at around 800 billion won ($589 million).

Chungho Chairman Chung Hui-dong has a 75.1% stake in the company. Microfilter Co., an affiliate of Chungho, has a 12.99% stake and Chairman Chung’s younger brother has 8.18%. 

The Rosemont, Illinois-based company was established in 1936 and is the top player in the US water purifier rental market. As part of its water treatment business, Culligan offers water softeners, drinking water filtration systems and bottled water delivery, among others. 

Culligan is present in about 90 countries, including Korea, and hires more than 7,500 employees. 

The company’s ties with Chungho go back to 2018 as the two companies partnered in the ice-making machine business. 

Chungho is planning to use the upcoming fresh injection of funds to allow it to regain its market strength. 

Chairman Chung founded the company in 1993 and it once enjoyed 40% market share, thanks to first mover advantage. 

But hit by fierce competition from newcomers to the market, the figure has slid to around 10% in recent years.

Write to Chae-Yeon Kim at why29@hankyung.com
Jee Abbey Lee edited this article.