July 25, 2014
CP Group in US$1.9 billion investment deal
Under the deal, Thai Charoen Pokphand Group (CP Group) and Japan trading house Itochu will each buy a stake in each other's businesses, Wall Street Journal reports.
CP Group will purchase a 4.9% stake in Itochu for about US$1 billion, while Itochu will pay about US$854 million for 25% of CP Pokphand Co., a Hong Kong-listed unit of CP Group. The Group owns 25% of Charoen Pokphand Foods, or CP Foods, Thailand's largest meat and animal feed producer, with revenue last year of about US$12 billion. It is also one of the world's leading shrimp producers.
Unlike other Japanese trading houses that deal mainly with energy and natural resources, Itochu's focus is on food, textiles and fashion. Mr. Takayanagi, the strategy officer for Itochu, said, "They (CP Group) are very strong in livestock food. We have already started talking about supplying grains for them." Itochu is also considering investing in grain elevators.
Japanese trading companies like Itochu have said they see a bright outlook for food businesses in developing Asian countries where consumer tastes are shifting towards new and pricier foods.