Japanese giant seeks control over Vietnam's leading pharma firm

15:34 | 15/03/2019 Companies

Japan’s Taisho wants control of the DHG Pharmaceutical Company by raising its stake to 56.69 percent from 35 percent.

A DHG Pharma factory in Tan Phu Thanh industrial park in the southern province of Hau Giang - Photo by VnExpress

The pharmaceutical giant has announced plans to buy 28.36 million DHG shares, equivalent to 21.7 percent, of DHG Pharma.

The disclosure came a week after Taisho Pharmaceutical purchased 925,200 DHG shares (about 0.7 percent).

The share price Taisho is offering this time is reportedly VND120,000 ($5.17), which would entail an investment of VND3.4 trillion ($129 million) to buy 21.7 percent more shares to increase its stake to 56.69 percent.

In October last year, Taisho had successfully bought 44.8 million shares to own 34.3 percent of Hau Giang's chartered capital.

Taisho has started pouring capital into Hau Giang Pharmaceutical since May 2016, first with a 24.5 percent equity stake. It has since continued buying more shares to raise its stake in the largest pharmaceutical enterprise in the Mekong Delta region.

The State Securities Commission has allowed DHG to increase its foreign ownership to 100 percent since mid-2018, opening up opportunities for foreign investors, especially Taisho Pharmaceutical.

The State Capital Investment Corporation (SCIC) is currently the largest shareholder of DHG Pharma with a 43.31 percent stake. If SCIC does not sell, Taisho needs to buy shares of all other shareholders to reach its goal.

Early March, the DHG price went up by nearly 60 percent over the beginning of the year to VND119,000 ($5) per share.

The estimated capitalization of this enterprise is approximately VND15 trillion ($646 million).

In 2018, DHG Pharma recorded nearly VND3.9 trillion ($168 million) in revenue and VND732 billion ($31.5 million) in pre-tax profits. It gave a 30 percent cash dividend to shareholders.

Theo Vnexpress