Comprehensive M&A data with integrated detailed company information

CJ CheilJedang bids for Schwan’s: The Investor
Posted on Friday, 08 June 2018 10:14
CJ CheilJedang has released a statement in response to a recent report by the Investor suggesting South Korea’s leading food manufacturer tabled an offer of KRW 3,000 billion (USD 2.80 billion) in a preliminary round of bidding for privately-owned, US-based Schwan’s.

The East Asian sweetener, oils, sauces, meat and feed and livestock corporation confirmed it is considering the acquisition of a processed food company based in the States as part of efforts to strengthen its competitiveness overseas.

While it declined to provide a name of the target and cautioned nothing has been decided yet, industry sources told the Investor yesterday the listed food arm of the Seoul-headquartered conglomerate holding company CJ Group is bidding for a “sizeable stake” in Schwan’s.

Established in 1952, the Marshall, Minnesota-based meal-ready frozen food distributor is touted as one of the largest food companies in the US and second only to Nestlé in the frozen pizza market.

Its major units comprise Schwan’s Home Service, Schwan’s Consumer Brands, Schwan’s Food Service and SFC Global Supply Chain, all of which contribute to marketing and distributing brands such as Red Baron and Freschetta throughout the US.

From production processing and developing new products to direct-to-home delivery by truck or by mail, and sales of items in grocery stores, Forbes ranks the business as one of the country’s largest private companies, with sales of USD 3.00 billion at the end of 2016.

So, it is perhaps unsurprising Schwan’s has drawn attention from interested overseas buyers as an acquisition of a stake would provide exposure to the food sector and act as a platform for product diversity and expansion in the US.

According to a CNBC report in November 2017, Schwan’s had hired Piper Jaffrey to weigh options, such as a full sale that could value the manufacturer at over USD 2.50 billion.

The article noted at the time CP Foods would be a logical acquiror as the Thai agro-industrial and food conglomerate bought Minnesota-based Bellisio Foods at the end of 2016 for USD 1.08 billion.

However, sources told the Investor that while this contender took part in the bidding for Schwan’s, it is likely to lose out to CJ CheilJedang due to the high price.

© Zephus Ltd