CheilJedang buys majority stake in CJ Logistics
The food maker’s acquisition of an additional 20.1 percent in CJ Logistics brings its total stake to 40.2 percent, making CJ Logistics a wholly-owned subsidiary of CJ CheilJedang.
On the same day, CJ Logistics also merged with the group’s real estate development company CJ Engineering and Construction. CJ Group said the mergers will generate synergy among the three companies.
CJ CheilJedang’s acquisition of CJ Logistics was done through its subsidiary Youngwoo Frozen Foods, which bought KX Holdings, the company that owned the stake in CJ Logistics.
CJ Logistics began as CJ Korea Express in 2011 after the conglomerate purchased Korea Express, a local delivery company, and KX Holdings was established as a special purpose company to hold shares in CJ Korea Express.
CJ CheilJedang and KX Holdings were each given 20.1 percent stakes in the company.
“We will take a quantum leap toward being a global life and culture company by maximizing synergy among the three companies,” CJ said in a statement.
CJ CheilJedang plans to utilize CJ Logistics’ global network of delivery centers to advance into overseas markets. With the help of CJ Engineering and Construction, the company also hopes to expand the centers. CJ Logistics stands to benefit by offering delivery services to CJ CheilJedang’s overseas manufacturing plants.
“It will become easier for CJ CheilJedang to target China’s fresh food market by using Rokin Logistics, which CJ Logistics recently acquired,” CJ CheilJedang said in a statement.
The food maker is building a frozen food factory in China.
In Brazil, CJ Logistics will handle delivery for Selecta, the country’s largest soy protein manufacturer, which CJ CheilJedang acquired this year.
“It has become possible for CJ Logistics to advance into Latin America’s grain market through Selecta,” CJ CheilJedang said.
CJ Group’s chairman, Lee Jay-hyun, has been emphasizing overseas expansion through mergers and acquisitions. In a speech earlier this year, he pledged to invest 900 billion won ($828 million) in new facilities and M&As for CJ CheilJedang. The latest affiliate reshuffle reflects this ambition.
CJ Group said in a regulatory filing that it received 1.87 million shares of CJ CheilJedang on Tuesday which is worth 726.9 billion won in return for Youngwoo Frozen Foods’ merge with KX Holdings.
BY JIN EUN-SOO [email@example.com]