CJ Group may sell more subsidiaries
Oct 10, 2020
CJ Group Chairman Lee Jae-hyun speaks during a meeting at the company’s headquarter in this 2017 file photo. / Courtesy of CJ Group
|By Kim Jae-heun|
After disposing of its coffee shop chain, A Twosome Place, last year and putting its bakery franchise Tous Les Jours on the market in September, CJ Group may sell more of its subsidiaries to fully focus on its main businesses.
Three years ago, CJ Group Chairman Lee Jay-hyun declared his vision of “World Best CJ,” in which his three companies in the food, logistics and entertainment sectors will become world No. 1s.
More specifically, CJ Cheil Jedang, CJ Logistics and CJ ENM are getting full support from Lee with hopes of achieving his goal.
The first step was to sell off A Twosome Place to Anchor Equity Partners, a private equity fund based in Hong Kong, for 270 billion won.
The brand was the second biggest coffee chain in the country with 910 stores before it was sold.
Last month, CJ Group announced it would dispose of its bakery chain ― also the No. 2 player in the market. Four local private equity funds, including JKL Partners and Affirma Capital, showed interest in the business.
Both A Twosome Place and Tous Les Jours were put up for sale not because of their poor performance but because of a change in the group’s business direction.
CJ Group wants to focus on the food manufacturing sector, not food services or food franchise businesses.
Another subsidiary that is under consideration for possible disposal is CJ CGV, the largest multiplex cinema chain in the country and the fifth largest in the world.
Struck hard by the COVID-19 pandemic and the decreasing number of moviegoers owing to the increasing popularity of streaming services such as Netflix, the CJ Group chairman is very likely to sell this business next.
Meanwhile, Lee has handed over CJ Foodville’s production facility in Jincheon, North Chungcheong Province to CJ Cheil Jedang for 20.74 billion won. At the same time the food service unit also allowed the food manufacturing firm to use its Korean traditional food brand Bibigo.
Most importantly, CJ Olive Young will play a pivotal role in supporting the backend of the three main business.
CJ Olive Young has already started attracting investors for a pre-initial public offering (IPO) in 2022. The group’s health and beauty product store make up over half the market and it has no rival on the scene.
CJ Olive Young CEO Koo Chang-gun last month, revealed the company’s plan to go public on the company’s online employee community board.
Koo noted that the generated funds will be used for investments, and merger and acquisitions.
He emphasized though that the cosmetic company’s IPO will not affect CJ Group’s controlling stake and its ownership of the company will not change.
Source: The Korea Times