Schwan’s makes deal
Founder’s family retains 20 percent ownership in agreement with S. Korean company
MARSHALL — It’s a new era, leaders at Schwan’s Company said — but although the major food manufacturer will be moving forward with a new global partner, Schwan’s won’t be cutting its ties to Marshall.
Schwan’s Company announced it has reached an agreement to sell a majority stake of the company to CJ CheilJedang (CJCJ), of Seoul, South Korea. The sale will include 80 percent of Schwan’s and subsidiaries that focus on foods sold in retail stores, grocery stores and food-service venues. The sale will also include the company’s manufacturing and logistics operations. However, the Schwan family will keep 20 percent ownership of the businesses being sold, as well as 100 percent ownership of Schwan’s Home Service, Inc.
After the sale is complete, Schwan’s will operate as a subsidiary of CJ Foods America Corp. But it will still be headquartered in Marshall and Bloomington, and the current senior management team at Schwan’s will remain in place, the company announced.
Paul Schwan, a Schwan’s board member and son of company founder Marvin Schwan, said one of the key things considered in the sale was finding a partner who would honor the Schwan’s legacy.
“We’re not expecting any change,” he said.
“We’re pretty excited right now,” Schwan’s CEO Dimitrios Smyrnios said of the sale. He described the move as a win for Schwan’s, current employees, the Schwan family, and CJCJ.
“We are entering a new and exciting era at Schwan’s, and we look forward to working closely with our new team members to further strengthen our operations and accelerate growth for the benefit of consumers, customers and employees,” Smyrnios said. “CJ ChilJedang is an extraordinarily world-class and innovative company well-known for their success worldwide, and we are very impressed with their global growth plans and investments in the United States. The future for Schwan’s and our people is very bright.”
Schwan’s Company started out in 1952 as a home delivery business. Now, Schwan’s is a food manufacturer and marketer with around 12,000 employees. Schwan’s brands range from Red Baron, Tony’s and Freschetta pizza to Mrs. Smith’s and Edwards desserts, and Pagoda Asian-style snacks.
In a press release, CJCJ said it would be acquiring the 80 percent stake of Schwan’s for $1.84 billion. The transaction is expected to close in the next 60 to 90 days, Schwan’s announced.
Media reports that CJCJ was interested in buying Schwan’s have circulated since June. At that time, CJCJ said in a regulatory filing that it was considering acquiring a U.S. processed food company in order to improve competitiveness overseas, although it didn’t name Schwan’s.
Paul Schwan said the success Schwan’s Company has had over the years helped draw interest in the business.
“It’s really interesting,” Schwan said. “After 66 years, the rest of the world is kind of catching on to what we’ve been doing.”
Schwan said it will be exciting to work with CJCJ. The company is a subsidiary of the CJ Group, and has 60 years of experience in the food industry. Schwan said CJCJ brings a lot to the table, including manufacturing experience and opportunities for future growth.
Marshall Mayor Bob Byrnes said he learned about the sale from Schwan’s leadership on Wednesday evening. From what he knew of the sale, he said, “This is probably the most positive outcome, that the organization stays intact.”
Schwan’s Company has played an important part in the growth and success of Marshall, Byrnes said, and continued stability and growth for the business would be positive for the community.
“We’re fortunate to have a company like Schwan’s that is committed to its history, and its history is Marshall,” Byrnes said.