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CJ to Inject 3 Tril. Won to Acquire US Food Firms This Year
Securing Foothold in North America
CJ to Inject 3 Tril. Won to Acquire US Food Firms This Year
  • By Choi Moon-hee
  • August 29, 2018, 12:34
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CJ Group will invest up to 3 trillion won (US$2.71 billion) to buy food companies in North America this year.

South Korean food giant CJ CheilJedang Corp. has succeeded in acquiring a U.S. food firm, accelerating its push into the North American food market.

According to food and investment banking (IB) industry sources on August 28, CJ Group plans to use up to 3 trillion won (US$2.71 billion) this year to buy food companies in North America. As its first move, the group has acquired Kahiki Foods.

Founded in 1961, Kahiki Foods Inc. is a frozen foods firm headquartered in Ohio. The company has built a strong brand in the frozen home meal replacement (HMR) segment with its frozen one-dish meals, frozen bowls of rice served with toppings, egg rolls and spring rolls. It supplies its products to large retail food outlets and warehouse clubs, including Walmart and Sam's Club. It is a mid-size firm whose annual sales reached 62.6 billion won (US$56.47 million) last year.

The latest acquisition is just a small step in CJ’s M&A plan for North America. The group is now seeking to acquire Schwan's Co., which ranks second in the U.S. frozen pizza retail market after Nestle.

According to market analysts, the estimated cost of acquiring Schwan's Co. is 2.7 trillion won (US$2.44 billion). CJ has enough funds to take over a 50 percent stake in Schwan's Co. as it will receive 1.31 trillion won (US$1.18 billion) by selling CJ HealthCare Corp. to Korea Kolmar. CJ is also considering acquiring 100 percent of the U.S. company.