CJ Group is converting into holding company system.
CJ Corp., the backbone of CJ Group, held a board of directors meeting on the 12th and reached the resolution to split the company into a holding company (tentatively named CJ Co., LTD.) and a business company (tentatively named CJ Food).
An insider of CJ said, “Conversion into holding company system has been decided in order to strengthen transparency of governance structure and to increase management efficiency, therefore to uplift the values of stockholders through separation between business and investment sectors.” Accordingly, the holding company will hold stocks of major subsidiary companies, such as food & food service (tentatively named CJ Food and CJ Food System, etc.), E&M (CJ Entertainment and CJ Media, etc.) and new logistics (CJ Home Shopping and CJ GLS, etc.), the cores business areas of CJ Group. The business company will have the existing business divisions of CJ Corp., such as of food, bio, pharmaceutical and feed, etc., and affiliates of food business in Korea, such as Samho F&G, Shindongbang CP and Samyang Oil, etc. as its subsidiary companies.
After the split, the holding company will take full charge of investment on subsidiary companies, while the subsidiary companies will focus on business management by being equipped with independent management system and rapidly responding to changes in management environment.
President Kim Jin-su of CJ Corp. said, “As it became possible to concentrate our capacities to the main business by escaping from the burden of investment in the affiliates, which had been the discount factor of our company, competitiveness of the business company will increase and its corporate value will be maximized.” He added, “Considering that the company’s growth potential is No. 1 in the industry, it will be a good opportunity for its value as a business company to be properly evaluated.”
The method of split to be employed by CJ is personnel division, of which split of corporate properties and stocks held by stockholders is jointly administered. A stockholder to hold 1 stock of CJ Corp. will receive 0.63 stock of the holding company and 0.37 stock of the business company. For example, a stockholder to hold 100 stocks of CJ Corp. will receive 63 stocks of CJ Co., Ltd. (tentative name), the holding company, and 37 stocks of CJ Food (tentative name), the business company. The split companies will be re-listed in the securities market at around the 4th of October.