SEOUL—South Korean food and beverage giant CJ CheilJedang is poised to divest its livestock and feed subsidiary, CJ Feed&Care, to the Netherlands-based animal nutrition specialist Royal De Heus, in a transaction valued at approximately 1.2 trillion Korean Won (KRW). The move signals a clear commitment from CJ CheilJedang to streamline its operations and strengthen its balance sheet by shedding non-core assets.
Sources within the investment banking community confirmed that CJ CheilJedang is scheduled to convene a board of directors meeting on October 1st to officially approve the sale of a 100% stake in CJ Feed&Care. The final sale price is reported to be in the region of 1.2 trillion KRW, positioning it as a significant M&A deal in the regional agribusiness sector.
CJ Feed&Care, established in 2019 following a physical spin-off of CJ CheilJedang's Bio Resource business unit, operates an expansive network across South Korea and Southeast Asia, with a substantial presence in Vietnam, the Philippines, and Indonesia. The unit, which handles feed manufacturing, livestock farming, and fresh meat production, generated 2.3085 trillion KRW in sales last year. Crucially, the company achieved a turnaround in profitability, posting an operating profit of 74.7 billion KRW, rebounding from an 86.4 billion KRW operating loss the year prior.
Despite the recent financial recovery, the feed and livestock business has been a source of volatility for its parent company. This marks CJ CheilJedang’s third attempt to sell the unit since 2019 and 2020, with previous efforts, including negotiations with Dutch firm Nutreco, collapsing over price disagreements. The business's high sensitivity to raw material price swings and dynamic livestock market demand has long been cited as a major risk factor.
For the buyer, Royal De Heus, the acquisition is a strategic gambit to accelerate its expansion in the burgeoning Asian market. Founded in 1911 as a grain trading and milling enterprise, the family-managed Dutch company has systematically grown its global footprint in animal nutrition. The purchase of CJ Feed&Care, following their recent acquisition of Belgium’s Bordershuis, will instantly grant Royal De Heus a solid platform and established market share across key Southeast Asian nations.
The influx of over a trillion won in cash is expected to be a major boon for CJ CheilJedang, aligning with its strategy to focus on its core food business. The proceeds are earmarked for a material reduction in net borrowings, setting the stage for a much-anticipated improvement in the company's overall financial structure.
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