CJ·Naver's Meaningful Partnership... Lee Jae-hyun "Strengthening the Three Major Areas: Food, Distribution, and Culture"

Strategic Alliance with Naver... Restructuring the Three Core Business Areas: Food, Distribution, and Culture
Laying the Foundation for 'WorldBestCJ'... Anticipating Synergy Effects in Cultural Content Business

[Asia Economy Reporter Lee Seon-ae] As CJ Group pursues a strategic partnership with Naver, it is expected to further strengthen the restructuring focused on the three core businesses led by CJ Group Chairman Lee Jae-hyun. While securing a super-gap capability in the food, distribution, and culture (entertainment) sectors represented by CJ CheilJedang, CJ Logistics, and CJ ENM, the partnership with Naver aims to address challenges in platforms and digital transformation, areas where CJ Group has been relatively weak, thereby firmly laying the foundation for the vision "World Best CJ" to become number one in these three business fields by 2030.

On the 15th, CJ Group stated, "We are in discussions for a 'comprehensive business partnership' with Naver, considering the participation of three affiliates: CJ Logistics, CJ ENM, and Studio Dragon," and added, "We expect synergy from combining CJ Logistics' logistics system capabilities with the cultural content competitiveness of CJ ENM and Studio Dragon and Naver's ICT-based commerce (e-commerce)." The scale, method, and schedule of the business partnership have not yet been finalized. Industry insiders believe that since Naver is considering investing in CJ Logistics, CJ ENM, and Studio Dragon, the partnership between the two companies will likely take the form of a stock swap.

If the partnership with Naver is realized, CJ's competitiveness is expected to grow in various areas such as distribution and cultural content. CJ is engaged in diverse cultural content businesses including broadcasting, music, dramas, and films. Utilizing Naver's intellectual property (IP) such as webtoons and web novels, CJ ENM can produce and broadcast dramas, or conversely, transfer CJ ENM's Hallyu content capabilities to Naver's platform for online distribution. Notably, Naver, as the world's number one webtoon platform, and CJ's video planning and production capabilities combined with Naver webtoon content can target global market expansion. Additionally, the collaboration between Naver, which holds an advantage in online shopping, and CJ Logistics, the number one logistics company in Korea, is expected to impact the commerce market. CJ O Shopping, the number one home shopping company, owns the online mall CJmall, raising expectations for creating new business models in Naver Smart Store and trending live broadcasts. Instead of increasing internal investments in platform business and IT technology, CJ has chosen to partner with Naver.

Chairman Lee has continuously streamlined non-core businesses to focus on key sectors. Since 2018, CJ has sold off non-core businesses such as CJ Healthcare and CJ Hello, signaling a blueprint to concentrate on food, distribution, and culture. Accordingly, last year, CJ Foodville sold its profitable division, Twosome Place, and earlier this year, even the country's second-largest bakery brand, Tous Les Jours, was put up for sale. This strategy involves boldly selling businesses where achieving industry leadership is difficult to secure investment funds. Consequently, it is anticipated that non-core affiliates CJ Foodville and CJ CGV will soon undergo restructuring through mergers and acquisitions (M&A).

CJ Logistics is currently pursuing the sale of its Chinese frozen and refrigerated logistics subsidiary CJ Logiken, while CJ Olive Young plans to conduct a pre-IPO equity investment aiming for an initial public offering (IPO) in 2022. Through the restructuring of non-core affiliates and IPO initiatives, CJ Group intends to improve its financial structure and allocate the secured funds to strengthen CJ Logistics' super-gap capabilities through strategic partnership and related facility investments with Naver, and to expand CJ ENM's entertainment business.

This content was produced with the assistance of AI translation services.