The acquisition, with Bunge agreeing to buy South Korean CJ Cheiljedang Corporation's equity stake in the soy crusher, is expected to close “in 2024”, confirmed John Neppl, CFO, Bunge on the call.
Korean media had reported the sale at US$357m for a 66% stake. When an analyst asked the CFO to explain the value differential in what the seller reported and the price the Bunge executive team announced on the earnings call, he said: “The Korean owners that announced [that] only owned 65% of the JV. So, they were just reporting on the proceeds they were going to receive in the transaction."
This strategic deal strengthens Bunge’s position in the animal feed ingredients market.
CJ Selecta, headquartered in Brazil's Minas Gerais state, is the world's largest producer of SPC; it operates a facility in Araguari and supplies the critical feed ingredient to the aquaculture sector as well as to pig, poultry, equine and cattle segments. The company recorded revenues of around US$900m in 2022.
Greg Heckmann, Bunge CEO, on the earnings call, said CJ Selecta had been a target for years. The agribusiness giant, he added, sees long term growth potential in the SPC market.
Bunge tried unsuccessfully to buy the SPC producer from CJ Cheiljedang in 2022 but came back to the negotiating table in April this year, reported Reuters.
CJ Cheiljedang only acquired its controlling stake in the Brazilian company in 2017, in a deal valued at the time at around US$195.2m.
Meanwhile, Heckmann also reported last week that construction is progressing well on Bunge’s SPC production facility in Morristown, Indiana. “And we're nearly ready to begin serving customers from our new highly efficient multi-oil facility in India.”