CJ CheilJedang sells entire stake in Brazilian subsidiary CJ Selecta

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CJ CheilJedang sells entire stake in Brazilian subsidiary CJ Selecta

Published: 10 Oct. 2023, 18:59 Updated: 11 Oct. 2023, 09:40

SEO JI-EUN
seo.jieun1@joongang.co.kr

[CJ CHEILJEDANG]

CJ CheilJedang will sell its entire 66 percent stake in its Brazilian subsidiary CJ Selecta to Bunge Alimentos S.A. for an estimated transaction price of 480.5 billion won ($356.2 million).

CJ Cheiljedang sells 60% take in Chinese subsidiary for $236M

The disclosed transaction price is provisional, with the final amount to be determined at the deal-closing stage. Bunge Alimentos S.A. is the Brazilian subsidiary of the U.S.-based agribusiness firm Bunge.

The proceeds of the sale will be used for its biotech business portfolio, focusing on high-value specialty amino acid and solution products, as well as for improving operational efficiency, the food arm of CJ Group said.

“The divestment was decided based on our 'selection and concentration' approach,” CJ CheilJedang explained Tuesday. “While the proceeds are planned to be used to enhance business competitiveness, the specific allocation has yet to be finalized.”

CJ Selecta holds the biggest position in the global soybean processing industry, particularly in the production of soy protein concentrate, a crucial ingredient in animal feed. The subsidiary's revenue for 2022 reached 1.13 trillion won backed by rising soybean prices, making it a valuable asset within CJ CheilJedang's portfolio.

CJ CheilJedang had previously acquired a total of 66 percent of the company's shares through transactions in 2017 and 2019. The ownership structure includes a direct 10 percent stake held by CJ CheilJedang itself, along with a 56 percent stake owned by CJ CheilJedang's special purpose company CJ Latam.

The move aligns with CJ CheilJedang's recent sale of its Chinese food subsidiary, Sichuan Jixiangju Food, in July. Despite Jixiangju's stable financial performance, with a 2022 revenue of 209.1 billion won, the decision to sell was attributed to a misalignment of its core product offerings, primarily centered around Chinese-style pickled vegetables and sauces, while CJ CheilJedang's global strategic products include gim (seaweed), mandu (dumplings) and kimchi.

BY SEO JI-EUN [seo.jieun1@joongang.co.kr]