April 25, 2024

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[THE INVESTOR] Korean food giant CJ CheilJedang on Nov. 15 announced that it is set to acquire US food processor Schwan’s after board approval.

The company will acquire 80 percent stake for around US$1.84 billion, while making sure that the remaining shares do not get sold to a third party through rights of first refusal in its contract with the US firm.

Since it is the biggest acquisition of CJ, the company said will share financing with private equity firm JKL Partners, having formed a consortium in August. CJ will pay more than half the amount required for acquiring Schwan’s while JKL Partners will fund around 700 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. Its sales in 2017 reached 3.24 trillion won while posting 280 billion won operating profit.

Meanwhile, another affiliate CJ Logistics is also preparing to sign a mega deal. In October, it formed a consortium with Korean PEF STIC Investment to acquire German-based logistics company Schnellecke, which is expected to be valued at around 1 trillion won.

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