The Bangkok-headquartered Charoen Pokphand Group (CP) and Osaka and Tokyo-based Itochu Corp. announced on January 20 that they will jointly invest US $10 billion in CITIC, China’s largest conglomerate.
A joint investment company, doing business as SPC, has been established to obtain ordinary shares (10%) and preferred shares (convertible to approximately 13.4% of ordinary shares) of CITIC. Upon conversion of the preferred shares into ordinary shares, CITIC will become an affiliated company of SPC.
CP, under the leadership of Chairman and CEO Dhanin Chearavanont, is Thailand’s largest agricultural group. Starting out as a seed shop in 192, today the company operates a host of diversified companies engaged in everything from animal feed and farming to frozen poultry production, shrimp aquaculture, food retailing (7-Eleven convenience stores, Chester’s Grill, Lotus SuperCenters, SIAM Makro Plc) as well as property development, pharmaceuticals, telecommunications and other commercial sectors.
Itochu, Japan’s third largest consumer goods trader, is involved in food and logistics as well as apparel and mining. In 2013 it acquired Dole Food Company’s Asian fruit and vegetable business, as well as its global canned foods operation.
The Beijing-headquartered CITIC Group, a state-owned enterprise founded in 1979 by Roen Yiren, consists of over 44 subsidiaries active in a wide swatch of the nation’s commerce. Its consumer-related interests include food logistics, wholesaling and retailing.
Itochu’s investment in CITIC is by far the biggest made by a Japanese company in China. CP is said to have been the first large-scale foreign investor in the PRC market after it was opened to outsiders following Deng Xiaoping’s liberalization. Its Chia Tai Co. agribusiness unit, established in Shenzhen in 1979, has the registration number “001.”
