Charoen Pokphand Foods Public Company Limited (CP Foods) announced in a press release that its Board of Directors has approved an additional investment by its subsidiary, CPF Investment Limited, to acquire the remaining 23.8% stake in C.P. Pokphand Co., Ltd. (CPP). The transaction will bring CP Foods’ ownership in CPP to 100%.
CPP operates integrated agri-food businesses in Vietnam, while in China, it is engaged in integrated broiler production, food processing, aquaculture, animal feed, and swine businesses.
This investment will enhance CP Foods’ strategic flexibility and operational efficiency while unlocking new expansion opportunities in Vietnam, one of the region’s most promising growth markets.
CP Foods stands ready to pursue the opportunity to list on the local stock exchange, pending the Vietnamese government's approval for foreign companies to do so. In China, the company is also adjusting its business strategy to align with the evolving market environment, aiming to sharpen its competitiveness.
The Board approved this investment at a total value of USD 1.1 billion, which involves acquiring the remaining stake from ITOCHU Corporation. Following this move, CP Foods expects an increase in consolidated net profit contribution from CPP and an improvement in Return on Equity (ROE).
The valuation for the transaction was determined by financial consultants based on the potential for future business growth, utilizing internationally recognized financial methodologies. These methods include Discounted Cash Flow (DCF) analysis, as well as market comparable approaches such as EV/EBITDA and P/E ratio benchmarking.
Mr. Prasit Boondoungprasert, chief executive officer of CP Foods, said that “over the past decade, our partnership has generated significant mutual business value through trade and joint investments, leveraging our complementary capabilities in raw material sourcing and product merchandising. Although the ownership structure is evolving, our collaborative initiatives will persist, underpinned by a shared commitment to fostering long-term business synergy."
