Ping An Insurance Group Co. of China Ltd will become the largest shareholder in Japanese drugmaker Tsumura & Co. by acquiring a 10% stake in the firm for ¥27.3 billion (US$243.7 million).
Tsumura is a leading prescription drugs manufacturer in Japan, specialising in “kampo” herbal medicines. It has annual revenue of around US$980 million.
In a statement, Tsumura said that it will place 7.7 million newly issued shares and treasury stock with Ping An at a 9.4% discount on Friday’s closing price. The deal is expected to close on October 13, reports Reuters.
Tsumura added that both companies are working together to form joint ventures in procuring herbal medicine components, as well as production and sale of traditional Chinese medicine. The Japanese firm relies on imports from China for 80% of its materials, and it needs to stabilise its supply chain due to growing demand for kampo and other forms of traditional Chinese medicine have driven up prices of herbal ingredients.
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