April 26, 2024

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[THE INVESTOR] Korean food giant CJ CheilJedang has formed a consortium with Korean private equity firm JKL Partners to acquire US food processor Schwan’s, according to news reports on Aug. 2.

Industry watchers project the valuation of the US firm to be around 2 trillion won (US$1.7 billion) to 3 trillion won, of which CJ has reportedly secured about 1.3 trillion won. 

The reports said CJ recently held meetings with three local PEFs and decided JKL Partners as its partner considering its experience in several big deals.

Back in 2011, JKL Partners worked as an M&A consultant for Korean livestock and animal feed maker Harim Group and successfully assisted the company in signing an acquisition deal worth 140 billion won with US company Allen Family Foods. Moreover, the firm recently raised a fresh funding worth 480 billion won,.

Established in 1952, Schwan’s is one of the largest food companies in the US and is the No. 2 player in the frozen pizza market with around 19 percent market share. CJ’s brand Bibigo, which is well known for its frozen dumplings, and Schwan’s retailing power are largely expected to produce powerful synergies and help CJ to expand its presence further in the US.

By Song Seung-hyun (ssh@heraldcorp.com)