**Valuation 6 Trillion Won… Morgan Stanley Appointed as Lead Manager**
**Prospects for Large-Scale M&A with Sale Proceeds**
CJ CheilJedang is moving to sell its world-leading bio business in the green bio sector. According to industry sources on the 18th, CJ CheilJedang has selected Morgan Stanley as the lead manager for the sale of its bio business division, and the company is reportedly in talks with potential acquirers. The sale price is expected to reach 6 trillion won.
The bio division of CJ CheilJedang mainly focuses on the green bio business, producing food seasoning ingredients and amino acids for animal feed. CJ CheilJedang holds the top world market share in products like lysine, tryptophan, nucleotides, and valine. Last year’s bio business revenue was 4.1343 trillion won, accounting for 23% of CJ CheilJedang’s total sales, and its operating profit (251.3 billion won) accounted for 30% of the total. Cumulatively, until the third quarter of this year, the bio division recorded sales of 3.1952 trillion won and an operating profit of 279.2 billion won.
The bio business division, along with the sugar business, is the foundation that has grown the company into a global firm. The origins can be traced back to CJ launching its MSG (monosodium glutamate) business in 1963 as ‘Mipung’, after receiving technical know-how from Japanese sweetener company Ajinomoto. The decision to sell the core bio business seems to stem from the assessment that the green bio sector has high performance volatility due to global market trends and low entry barriers, resulting in limited future growth potential.
The industry anticipates that CJ CheilJedang will pursue large-scale mergers and acquisitions (M&A) with the proceeds from the bio business sale. Previously, in 2018, CJ CheilJedang sold its health and functional food division, CJ Healthcare, to Kolmar Korea for 1.3 trillion won, which supported the acquisition of Schwan’s Company, the second-largest frozen food company in the United States. After acquiring Schwan’s Company for 2.1 trillion won, CJ CheilJedang’s U.S. food sales grew substantially from 362.9 billion won to 4.3807 trillion won last year.