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CJ CheilJedang Headquarters (Photo = CJ) |
[Alpha Biz= Paul Lee] Seoul, September 30 – CJ CheilJedang announced plans to sell its feed and livestock subsidiary CJ Feed&Care to Dutch animal nutrition company Royal De Heus in a deal valued at approximately KRW 1.2 trillion (USD 870 million).
According to investment banking industry sources, CJ CheilJedang will convene its Board of Directors on October 1 to approve the sale of 100% of CJ Feed&Care shares to Royal De Heus.
Established in 2019 through the spin-off of CJ CheilJedang’s Bio Resources Division, CJ Feed&Care operates feed, livestock, and fresh meat businesses in South Korea, Vietnam, the Philippines, Indonesia, and other Southeast Asian markets. The company recorded KRW 2.31 trillion in revenue and KRW 74.7 billion in operating profit in 2023, successfully turning around from a KRW 86.4 billion operating loss in the previous year.
This marks CJ CheilJedang’s third attempt to divest the subsidiary after earlier efforts in 2019 and 2020. Analysts have noted that the feed and livestock sector faces limited growth potential, with profitability heavily influenced by volatile raw material prices and fluctuating demand in livestock markets. CJ previously entered negotiations with Dutch feed company Nutreco, but talks collapsed due to differences over valuation.
Founded in 1911, Royal De Heus began as a grain trading and milling business before expanding into animal feed and nutrition. Still managed by the De Heus family, the company has pursued aggressive expansion in Asia, including the acquisition of Belgian feed producer Voeders Huys earlier this year.
Industry observers expect the acquisition of CJ Feed&Care to strengthen Royal De Heus’ Asian growth strategy, while CJ CheilJedang secures substantial liquidity for debt reduction and balance sheet improvement.
Alphabiz Reporter Paul Lee(hoondork1977@alphabiz.co.kr)
