Taisho group buys 24% of Vietnam's DHG

 

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 per cent remaining.

 

The value of the deal was not disclosed, but based on June 30 data, with each DHG share ending at 103,000 dong, the deal should be worth nearly 2.2 trillion dong (US$98 million).     

 

Based in Can Tho province 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 per cent of the stake, was DHG’s largest shareholder, followed by Franklin Templeton Investment funds - Templeton Frontier Markets Fund, with 9.44 per cent, and Portal Global Limited Holding, with 7.7 per cent. 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 3.6 trillion dong in the fiscal year that ended on Dec 31, 2015, posting a year-on-year decrease of 8 per cent. Of this amount, the company’s net revenue in Q4 of 2015 reached 1.149 trillion dong. After Q1 this year, DHG rose 22 per cent in sales, reaching 815 billion dong. Its net profit also soared 26.3 per cent, reaching 368 billion dong. For the entire year in 2016, the company aims to earn 3.7 trillion dong in revenue and 750 billion dong in pre-tax profit.

 

After the announcement of the 35 per cent dividend for 2015 in May, DHG shares surged by more than 23 per cent from a value of 82,000 dong to some 100,000 dong each on the HCM 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 $2.7 billion and profit after tax of $210 million. In the local market, Taisho founded an $11.8 million investment company that manufactures and distributes Lipovitan drinks. 

 

(US$1 = 22,605 dong as of 7/6/2016 via oanda.com)