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THE INVESTOR
March 21, 2019
Big Reunion

Deals

CJ CheilJedang denies rumors of buying Prinova for W1tr

  • PUBLISHED :February 28, 2019 - 16:22
  • UPDATED :February 28, 2019 - 16:38
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CJ CheilJedang on Feb, 28 denied rumors that it is considering buying US ingredient and flavor solutions provider Prinova Group, in a deal roughly estimated to cost 1 trillion won (US$889.44 million).

“We are not at the stage to consider or express an interest in the acquisition,” a CJ CheilJedang spokesperson told The Investor. “Our finance team does not have any information about Prinova.”

CJ CheilJedang’s stock price edged down 0.5 percent at close on Feb. 28. 

Courtesy of Prinova Group

Related:
CJ CheilJedang to acquire Schwan’s for $1.84b
Korean conglomerates to embark on more M&As this year

The Korean food giant was rumored to have submitted a bid for acquiring Prinova Group, which would mark the third-largest in size for the food arm of CJ Group, following the 2 trillion won purchase of CJ Logistics in 2011 -- formerly known as Korea Express -- and the recent 1.9 trillion won purchase of US frozen food firm Schwan’s.

Founded in 1978, the Carol Stream-based Prinova Group has a distribution network across North America, as well as European countries like France, Belgium, the Netherlands and Luxembourg. The company in 2017 acquired the nutrient premix business of Israel-based Lycored.

CJ CheilJedang has moved to secure a foothold in the US through a series of mergers and acquisitions.

Apart from the latest purchase of Schwan’s, CJ’ food arm in August last year also bought Ohio-based Kahiki Foods, in line with previous US acquisitions such as Annie Chun’s in 2005, Omni in 2009, TMI Trading, Twin Marquis and Chef One Corp. in 2013.

Partly due to such acquisitions, CJ CheilJedang has been under escalating leverage pressure. As of end-September, its leverage came to 7.6 trillion won, up 11 percent compared to end-2017, according to a consolidated financial statement. The debt-equity ratio also came to 169.8 percent in September 2018.

Courtesy of Prinova Group

By Son Ji-hyoung (consnow@heraldcorp.com)

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