CJ Group is looking to sell off its pharmaceutical unit CJ Healthcare in what market watchers perceive is a strategic move to part with less-profitable businesses and concentrate investment into more promising sectors.

CJ CheilJedang, which owns a 100 percent stake in CJ Healthcare, announced Friday that it is “internally reviewing plans to sell its shares in CJ Healthcare, but nothing has been decided in detail yet.”

The disclosure came following local news reports that CJ Group was preparing to sell CJ Healthcare, with aims to complete the sale by around March.

CJ has reportedly hired Morgan Stanley as the underwriter for the sale. Three to four firms, including private equity funds, have already expressed interest in the purchase, according to local reports.

CJ Healthcare is expected to be sold at 1 trillion won ($900 million) or more, as its market capitalization was set at around 1 trillion won last year when it sought to go public. The initial public offering was postponed at the time due to unfavorable market conditions.

According to local reports, CJ CheilJedang will retain CJ Healthcare’s beverage business portion, the maker of Korea’s top-selling anti-hangover drink Condition.

If the sale goes through, the food-to-entertainment conglomerate will officially be pulling out of the pharmaceutical business after 34 years in the sector.

CJ jumped into pharmaceuticals in 1984 when CJ CheilJedang took over local drugmaker Yoopoong Pharmaceutical. It grew in size with the acquisition of Hanil Pharmaceutical in 2006. In 2014, CJ CheilJedang spun off its pharma unit into a new subsidiary, CJ Healthcare.

Market watchers speculate CJ is selling off its pharmaceuticals unit to reinvest its resources on its core businesses -- food led by CJ CheilJedang, logistics led by CJ Korea Express and entertainment led by CJ E&M.

The move comes as CJ Group Chairman Lee Jay-hyun has pledged to aggressively pursue global mergers and acquisitions, with aims to record a revenue of 100 trillion won and raise the overseas portion of business to 70 percent by 2020.

Despite its decadeslong presence in the pharma industry, CJ Healthcare’s revenue still hovers at around 500 billion won. Most of its sales are generated locally, via generic drugs marketed in Korea. It has a limited presence in markets overseas, clashing with CJ’s vision to go global.

CJ Healthcare recorded a revenue of 520.8 billion won and an operating profit of 67.9 billion won in 2016, ranking 10th in terms of annual sales among Korea’s pharmaceutical companies.

By Sohn Ji-young (jys@heraldcorp.com)