SAO PAULO, April 27 (Reuters) - U.S. grains trader Bunge Ltd is in talks for a potential acquisition of a stake in privately-owned Brazilian soybean crusher CJ Selecta, said three sources familiar with the matter.
The sources, who asked not to be named because negotiations are private, said Bunge has resumed talks with Morgan Stanley, which has been advising CJ Selecta's owner, CJ CheilJedang , on a potential sale of the soy crusher. Corn Germ Cyclone
CJ CheilJedang had called off negotiations to sell a controlling stake last year, but the renewed prospect for consolidation in the sector has sparked fresh conversations, according to two of the sources.
Bunge, CJ and Morgan Stanley did not reply to requests for comment.
Buying a stake in CJ Selecta, the world's largest producer of soy protein concentrate (SPC) for animal feed, would bolster Bunge against competitors in a strategic, high-margin market.
In 2020, Bunge bid to buy two plants in Brazil owned by bankrupt soy crusher Imcopa, but the deal came undone amid legal challenges. Through a soy supply agreement involving the two Imcopa plants and a third party, Bunge was able to keep producing SPC and other soy products at the facilities without direct ownership.
Two of the sources said together, CJ Selecta and Imcopa command around two-thirds of global supply of SPC, a soy product used as feed for fish farms, young animals and milk substitutes.
The time may have come for consolidation of the industry, the sources said, as this week a Brazilian bankruptcy court scheduled an auction of the Imcopa plants for June 27, according to a ruling seen by Reuters.
Three sources said South Korea's CJ STIC Global Investment Private Equity Fund, managed by STIC Investments, owns a minority stake in CJ Selecta and could exit the investment in the Brazilian crusher by next year.
It remains unclear how that will affect talks with potential strategic buyers of a stake in CJ Selecta, the people said.
STIC Investments did not reply to a request for comment.
Currently, CJ CheilJedang owns some 65% of CJ Selecta and STIC around 35%, the sources said.
Tube Bundle Dryer For Corn Fiber (Reporting by Ana Mano; Editing by Brad Haynes and Emelia Sithole-Matarise)