CJ Cheiljedang to acquire Dutch bio firm Batavia for 195 million euros

CJ Cheiljedang Corp., a key subsidiary of South Korea’s food and entertainment conglomerate CJ Group, said on Monday it is acquiring Batavia Biosciences B.V., a Dutch biotechnology company, to expand its presence in the contract biopharmaceutical production market.

CJ’s board of directors approved its plan to acquire a 75.8% stake in Batavia Biosciences for 195.3 million euros, or 267.7 billion won, the company said in a regulatory filing.

CJ Cheiljedang said it will purchase 50,807 shares in Batavia Biosciences, including 13,007 new shares, at 3,844 euros per share. The deal is subject to approval by regulatory authorities in both countries.

Based in the Netherlands, the biotechnology company specializes in the vaccine, monoclonal antibody and recombinant protein development. Established by Janssen Pharmaceuticals researchers in 2010, Batavia handles cell and gene therapies under a contract development and manufacturing organization (CDMO) scheme.

With the acquisition, CJ said it plans to expand its “red bio” business, a reference to the bio business in the medical and pharmaceutical fields.

NEW GROWTH SECTORS

The global cell and gene therapy CDMO market is forecast to grow at an annual average rate of 25-27% to $14 billion-$16 billion by 2030.

“There’s no dominant leader in the gene therapy treatment market. We want to grow big in this area as soon as possible,” said a CJ official.

Batavia Biosciences operates research and development centers and sales offices in Boston and Hong Kong, according to CJ.

The acquisition comes as CJ Group aims to grow biotechnology as one of its four key growth drivers.

Last week, CJ Group Chairman Lee Jay-hyun unveiled a 10 trillion won ($8.5 billion) mid-term growth plan.

He said the investment plan will focus on four growth areas – culture, platforms, wellness and sustainability – until 2023.

The conglomerate targets to derive 70% of its sales growth from the proposed four growth sectors over the next three years.

STRONG Q3 EARNINGS

On Monday, CJ Cheiljedang, the country’s largest food and beverage company, said its consolidated revenue, excluding that of affiliate CJ Logistics, reached 4.22 trillion won in the third quarter, up 12.7% from a year ago.

Operating profit rose 3.3% on year to 322.2 billion won.

CJ Cheiljedang’s bio business reported its best quarterly sales of 1.04 trillion won in the third quarter, up 35% from the year-earlier period. Operating profit increased 61% to 127.4 billion won.

Its food business, best known for its frozen food product brand Bibigo, posted 2.58 trillion won in sales, up 7.9% from a year ago, boosted by the growing popularity of Korean food abroad.

Write to Sul-Li Jun and Jong-Kwan Park at sljun@hankyung.com
In-Soo Nam edited this article.