MBK Partners, South Korea’s largest private equity firm, is in discussions to acquire the bio division of food giant CJ CheilJedang, according to sources on Friday.

Preliminary negotiations have valued the unit between 5 trillion won ($3.46 billion) and 6 trillion won, though the two sides have yet to reach a final agreement on pricing.

CJ CheilJedang’s bio division specializes in producing food seasoning materials and feed-grade amino acids using microorganisms. It holds the largest global market share in key feed-grade amino acids such as lysine and tryptophan.

The division is a crucial part of the conglomerate, contributing one-third of its operating profit.

The food giant initially put the bio division up for sale in November last year, appointing Morgan Stanley as the lead manager. However, the sale process was paused after only two Chinese strategic investors participated in the main bidding round in February.

In 2024, the bio division reported an operating profit of 337.6 billion won, up 34 percent from the previous year, with annual sales reaching 4.29 trillion won.

Meanwhile, MBK Partners is facing challenges with its portfolio company Homeplus, Korea’s second-largest supermarket chain.

Homeplus filed for corporate rehabilitation with the Seoul Bankruptcy Court on Tuesday following a series of credit rating downgrades, raising concerns about MBK’s ability to manage its investments.

By Park Han-na (hnpark@heraldcorp.com)