Bunge resumes talks for Brazil soy crusher CJ Selecta, sources say

CJ CheilJedang

27/04/2023 16:00

By Ana Mano
       SAO PAULO, April 27 (Reuters) - U.S. grains trader Bunge
Ltd  BG.N  is in talks for a potential acquisition of a stake in
privately-owned Brazilian soybean crusher CJ Selecta, said three
sources familiar with the matter.
    The sources, who asked not to be named because negotiations
are private, said Bunge has resumed talks with Morgan Stanley,
which has been advising CJ Selecta's owner, CJ CheilJedang
 097950.KS , on a potential sale of the soy crusher.
    CJ CheilJedang had called off negotiations to sell a
controlling stake last year, but the renewed prospect for
consolidation in the sector has sparked fresh conversations,
according to two of the sources.
    Bunge, CJ and Morgan Stanley did not reply to requests for
comment.
    Buying a stake in CJ Selecta, the world's largest producer
of soy protein concentrate (SPC) for animal feed, would bolster
Bunge against competitors in a strategic, high-margin market. 
    In 2020, Bunge bid to buy two plants in Brazil owned by
bankrupt soy crusher Imcopa, but the deal came undone amid legal
challenges. Through a soy supply agreement involving the two
Imcopa plants and a third party, Bunge was able to keep
producing SPC and other soy products at the facilities without
direct ownership.
    Two of the sources said together, CJ Selecta and Imcopa
command around two-thirds of global supply of SPC, a soy product
used as feed for fish farms, young animals and milk substitutes.
    The time may have come for consolidation of the industry,
the sources said, as this week a Brazilian bankruptcy court
scheduled an auction of the Imcopa plants for June 27, according
to a ruling seen by Reuters. 
    Three sources said South Korea's CJ STIC Global Investment
Private Equity Fund, managed by STIC Investments, owns a
minority stake in CJ Selecta and could exit the investment in
the Brazilian crusher by next year. 
    It remains unclear how that will affect talks with potential
strategic buyers of a stake in CJ Selecta, the people said.
    STIC Investments did not reply to a request for comment.
    Currently, CJ CheilJedang owns some 65% of CJ Selecta and
STIC around 35%, the sources said.  
    

 (Reporting by Ana Mano;
Editing by Brad Haynes and Emelia Sithole-Matarise)
 ((ana.mano@thomsonreuters.com; Tel: +55-11-5644-7704; Mob:
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