Taisho taking control of local largest pharmaceutical company

Accordingly, Taisho, a consolidated subsidiary of Taisho Pharmaceutical Holdings Co., Ltd., has sucessfully secured a tender offer for an additional 20.6 million out of the total 28.3 million issued shares of Hau Giang Pharmaceutical JSC, thus raising its ownership to 50.78 per cent, or 66.39 million shares in equivalent.

Hau Giang Pharmaceutical will thus become a consolidated subsidiary of the Japanese pharmaceutical company once the acquisition is completed.

At the offering price of approximately $5 a share, Taisho is known to spend about $107.3 million to increase its equity at Hau Giang Pharmaceutical.

Taisho is a relatively large Japanese pharmaceutical firm, which offers pharmaceuticals and health-related products. Currently, Taisho accounts for 13.5 per cent of the over-the-counter drugs in Japan and is seeking to expand its market to numerous countries including Indonesia, Thailand, Malaysia, Philippines, Vietnam and most recently Mexico.

The Japanese company has begun pouring investments into Hau Giang Pharmaceutical since May 2016 and has ever since made several attempts to gradually increase its ownership there. In particular it was known to made two purchases of issued shares at the local company last year, targeting to take control of the Vietnamese manufacturer of pharmaceuticals .

Hau Giang Pharmaceutical is one of the leading pharmaceutical firms in Vietnam. In 2019, its consolidated revenue and pre-tax profit are expected to reach $171 million and $32.7 million respectively, an increase of 1.6 per cent and 3 per cent on-year.

Hau Giang Pharmaceutical has also revealed its Q1 business results, reporting a 15 per-cent drop in revenue and 10 per-cent plunge in pre-tax profit, to $39.4 million and $7.4 million, respectively.

The company attributed its precaution in 2019 business plans and previous business declines to the impact of the rise in foreigner investors’ equity, reduced sales promotions and halted distributions of MSD and Eugica products.

Similar to other state-owned enterprises, Hau Giang Pharmaceutical is also on the list of state divestments. However, the State Capital Investment and Trading Corporation (SCIC) did not sell its stakes to Taisho in the recent bid.

SCIC is currently the second largest shareholder of DHG with 43.3 per cent stakes on hand.

According to Taisho, the acquisition of Hau Giang Pharmaceutical is in its plan to enhance its competitiveness in the global markets, especially Southeast Asia.