Japanese drug manufacturer Taisho Group has acquired more than 21.3 million shares or a 24.4% stake in Hau Giang Pharmaceutical Joint Stock Company (DHG), the group announced on July 5.
The group believes the transaction and alliance with DHG, as the leading drug maker in Vietnam, will enable it to share knowledge, technology and experience in the pharmaceutical business with DHG, resulting in an increase in sales and further growth for both company’s businesses in Asia.
In addition, synergy is expected between DHG, with its strong presence in Vietnam, and Taisho Group. The group is committed to enhancing its pharmaceutical business in Asia and is striving to grow various business segments in the continuously expanding Asian market.
According to data from the Vietnam Securities Depository, the Japanese drug maker bought the shares from 34 foreign shareholders, including Dragon Capital, VinaCapital and other stakeholders such as Fullerton, Nikko New Age Asia Equity, KITMC, Mekong Portfolio Investments Limited and Vietnam Holding. The foreign ownership percentage in DHG has almost reached its maximum level, with only 0.01% remaining.
The value of the deal was not disclosed, but based on June 30 data, with each DHG share ending at VND103,000, the deal should be worth nearly VND2.2 trillion (US$98 million).
Based in Can Tho since 1974, DHG Pharmaceutical Joint Stock Company is one of the leading drug makers in Vietnam. As of March 2016, State Capital Investment Corporation, with 43.31% of the stake, was DHG’s largest shareholder, followed by Franklin Templeton Investment funds - Templeton Frontier Markets Fund, with 9.44%, and Portal Global Limited Holding, with 7.7%. When Portal Global Limited announced the sale of DHG shares to Taisho, the other two shareholders announced no change to their own stake.
DHG reported marked net revenue of VND3.6 trillion in the fiscal year that ended on December 31, 2015, posting a year-on-year decrease of 8%. Of this amount, the company’s net revenue in Q4 of 2015 reached VND1.149 trillion. After Q1 this year, DHG rose 22% in sales, reaching VND815 billion. Its net profit also soared 26.3%, reaching VND368 billion. For the entire year in 2016, the company aims to earn VND3.7 trillion in revenue and VND750 billion in pre-tax profit.
After the announcement of the 35% dividend for 2015 in May, DHG shares surged by more than 23% from a value of VND82,000 to some VND100,000 each on the Ho Chi Minh City Stock Exchange.
Taisho Pharmaceuticals, headquartered in Tokyo, is a leading Japanese pharmaceutical company specialising in the manufacture of pharmaceutical products and non-prescription dietary supplements under well-known brands. In Southeast Asia, Lipovitan-D (energy drink with vitamins) is the company’s most famous brand.
In 2015, the parent company recorded revenue of US$2.7 billion and profit after tax of US$210 million. In the local market, Taisho founded an US$11.8 million investment company that manufactures and distributes Lipovitan drinks.