Nutreco in talks to buy CJ CheilJedang’s $1.7b animal feed assets

Sacks of Sprayfo calf milk replacer sit on pallets ahead of shipping at the young animal feed processing plant operated by Nutreco NV, in Deventer, Netherlands, on Tuesday, Dec. 9, 2014. Photographer: Jasper Juinen/Bloomberg

Aqua-feed supplier Nutreco NV is in advanced talks to buy the animal feed assets of South Korea’s CJ CheilJedang Corp. in a deal that could be worth about 2 trillion won ($1.7 billion), according to people with knowledge of the matter.

The sale, which the companies aim to reach an agreement this year, would include CJ’s feed mills in China and Southeast Asia, the people said, asking not to be identified because the information is confidential. Negotiations are ongoing and may not result in a deal, the people said.

CJ CheilJedang hasn’t decided to sell its feed business, a company spokesman, who asked not to be identified because of internal policy, said by phone. Julia Hart, a spokesperson for Nutreco, declined to comment “on market rumor or speculation” and said the company is continuously looking for opportunities that are in-line with its ambition to remain a sustainable global leader in animal nutrition and aqua feed.

Seoul-based CJ CheilJedang, part of South Korean conglomerate CJ Group, said last month that it was planning to spin off its domestic feed business on July 1 and will hold a shareholders meeting May 31 to approve the plan. The company’s shares rose as much as 2.2% on Tuesday and traded at 279,000 won per share as of 10:03 a.m. local time.

The sale of the animal feed assets would come after a period of overseas expansion by CJ, particularly in the frozen-food business. Last year, it agreed to pay $1.84 billion for a stake in Schwan’s Co. to expand its sales in the U.S. food market. In August, it said it would buy U.S.-based Kahiki Foods and Germany’s Mainfrost for undisclosed sums, according to Yonhap.

The company had total sales of 18.7 trillion won in 2018 and an operating profit of 833 billion won, according to its website. CJ owns as many as 32 feed mills in Korea, Indonesia, Philippines, Vietnam, China, Cambodia and Myanmar, its website shows.

Nutreco, which is most well known for its salmon feed, was taken over by family-owned SHV Holdings NV in a $4 billion deal in 2015. Employing over 12,000 people in 37 countries, it had net sales of 5.9 billion euros in 2018, according to its website.

Bloomberg