Schwan’s Co. today (Nov. 15) unveiled an agreement to sell 80 percent ownership of the company to CJ CheilJedang (CJCJ), of Seoul, South Korea, which already owns the Annie Chun's retail brand and Bibigo fast-food chain. Price was not disclosed.
The transaction will include 80 percent of Schwan’s Co. and specific subsidiaries that focus on foods sold in retail and grocery channels and foodservice venues. The Schwan family will retain 20 percent ownership in the businesses being sold to CJCJ and will also retain 100 percent ownership in Schwan’s Home Service Inc., which represents the legacy home-delivery business that Marvin Schwan launched in 1952.
The transaction is expected to close in the next 60 to 90 days. The sale will also include the company’s manufacturing and logistics operations and various professional and administrative services. By our count, Schwan’s has 17 food manufacturing facilities and 10 distribution centers across the U.S., while CJCJ has five.
Schwan’s began in 1952 as a one-man-and-a-truck home-delivery business operating in rural Minnesota. Today, it has 12,000 employees and brands that include Schwan’s; Red Baron, Freschetta and Tony’s pizzas; Edwards and Mrs. Smith’s desserts; and Pagoda Asian-style foods.
For several years now, our Top 100© list has estimated sales flat at $3 billion, with just more than half ($1.6 billion) devoted to food products Schwan's manufactures itself. Its home delivery business distributes many other branded food products.
"The purchase agreement with CJCJ is the result of a strategic process led by the Schwan family, the company’s board of directors and members of the senior management team to identify the right company to invest in the long-term future of Schwan’s," said a company announcement.
"Once the transaction is closed, Schwan’s will be operated as a subsidiary of CJ Foods America Corp., and its operations will continue to be headquartered at corporate offices in Marshall and Bloomington, Minn. Additionally, the current senior management team at Schwan’s will remain in place," the announcement continued.
“We are entering a new and exciting era at Schwan’s, and we look forward to working closely with our new team members to further strengthen our operations and accelerate growth for the benefit of consumers, customers and employees,” said Schwan’s CEO Dimitrios Smyrnios.
CJ CheilJedang is the core subsidiary in charge of the food and bioengineering business sectors of Korea's CJ Group, which has been in the Korean food industry for 60 years. According to one report, it was originally a part of Samsung Group.