CJ CheilJedang, South Korea’s agri-food company, has cancelled the sale of a 66% stake in Brazilian soybean crusher CJ Selecta after more than a year of negotiations with US grain trader Bunge.
According to the Korea Economic Daily, they had been in exclusive talks with Bunge since signing a share purchase agreement for CJ Selecta in October 2023. The deal was estimated at around USD 335 million.
“As the likelihood of fulfilling the transaction’s preconditions is unclear, we have notified the counterparty of the contract termination,” CJ said.
CJ Selecta is a large producer of soy protein concentrate (SPC), a key ingredient in feedstuff and health foods. It raked in USD 511 million in revenue last year.
Though considered a cash cow, CJ CheilJedang had decided to unload the unit generating a steady stream of profits to streamline business.
While their negotiations dragged on, market conditions have turned favorable for CJ, with global soybean prices recovering.
Additionally, the EU’s Regulation on Deforestation-free Products, set to take effect later this year, is expected to benefit CJ Selecta, which sources soybeans from non-deforested areas.
Under the regulation’s policies, products sold in the EU should not be sourced from deforested land or contribute to forest degradation.
The improved financial health of CJ CheilJedang has also strengthened its negotiating position, said investment bankers.
Its consolidated debt-to-equity ratio fell to 146% in 2024 from 151% a year earlier.