A Minneapolis-based food distribution company has just been sold to the largest food company in South Korea. The Schwan’s Company is a very popular home delivery service, known for their gold delivery trucks.
On Thursday, the company released a statement announcing they have sold a controlling 80 percent stake to South Korea’s CJ CheilJedang (CJCJ) for $1.8 billion. The stake will have control of The Schwan’s Company’s businesses, businesses which serve other businesses like grocery stores, restaurants, and other retail outlets.
Obviously, then, The Schwan family will retain the remaining 20 percent ownership of the business. However, the family will still hold onto 100 percent of their ownership of Schwan’s Home Service, Inc. This is the home-delivery business opened by proprietor Marvin Schwan, in Marshall, in 1952.
In addition, the companies report they will keep the Schwan name as well as its existing Minnesota offices (which are located in both Marshall and Bloomington). Also, current Schwan’s CEO Dimitris Smyrnios will hold his position.
Paul Schwan is a member of the Schwan’s Board of Director—as well as the son of founder Marvin Schwan—and the comments that the percentage stake and 100 percent retention are very important to the family. Of course, this type of sale is important not only to members of the Schwan family but their extended business family as well: namely the employees.
Smyrino comments, then, that this type of transaction always comes with some level of concern and anxiety. As such, they planned a company to share details of the deal and to discuss the potential future. For one, he will continue to handle the day-to-day operations while the executives (the Board, essentially) will also remain.
Currently, Schwan’s reports roughly $3 billion in annual sales. They manage this through the sale and distribution of a variety of frozen foods and ready-made foods. These products include Red Baron, Freschetta pizza, Tony’s pizza, and Mrs. Smith’s pies and Edwards desserts. Another of their arms handles food service to schools, hospitals, and other such institutions.
This deal has been in process since early in the summer and, most importantly, it is the largest acquisition from CJCJ. CJCJ is a conglomerate of food and other related companies of the CJ Group, which was actually originally a part of the Samsung Group; and this is their largest acquisition to date. Last year, CJCJ did $14.5 billion in sales.