"Japan's Top 2 Pharmacy Chains Merge... Targeting the Asian Market"

Industry Leader Welcia and Second Place Tsuruha Merge
Estimated Combined Sales Approximately 2 Trillion Yen (18 Trillion Won)

Japan's largest drugstore company, Welcia Holdings, is pushing for a merger with the industry's second-largest company, Tsuruha Holdings.

According to local media reports such as the Nikkei and Asahi Shimbun, Welcia and Tsuruha began negotiations yesterday to complete the management integration by December 2027.

[Image source=EPA Yonhap News]

Welcia's parent company, the retail giant Aeon, is already known to hold 13% of Tsuruha's shares. In the future, it plans to additionally purchase about 13% of Tsuruha's shares held by the Hong Kong investment fund Oasis Management for approximately 100 billion yen (about 890 billion KRW). Ultimately, Aeon aims to acquire more than 50% of Tsuruha's shares and incorporate it as a consolidated subsidiary by 2027.

Drugstores are retail businesses that mainly sell over-the-counter drugs without a doctor's prescription, along with health and beauty-related products and food items. If the leading companies in this field, Welcia and Tsuruha, merge, their annual sales will increase to about 2 trillion yen (about 178 trillion KRW), and they are estimated to hold a 25% market share within Japan. The two companies plan to reduce costs through logistics system integration and jointly develop private brand (PB) products.

The Nikkei noted, "Welcia and Tsuruha plan to use the merger as a stepping stone to expand overseas stores in China, Southeast Asia, and other regions," adding, "They are currently restructuring to achieve economies of scale before targeting overseas markets."

Jun Tsuruha, president of Tsuruha Holdings, said at a press conference held yesterday in Sapporo, "Our goal is to increase sales to 3 trillion yen (about 2,670 trillion KRW) in five years," and added, "We aim to become the world's top Asian drugstore."

Aeon's president Akio Yoshida also emphasized the company's global focus by stating, "We will become a strong company in Asia." Welcia Holdings' president Tadahisa Matsumoto said, "In Japan, where low birthrates and aging are progressing, drugstores will soon enter a mature phase and become saturated," and added, "We will rapidly expand in Asia by fully utilizing the Aeon Group's infrastructure."

Meanwhile, according to a ranking of global retailers by sales for the 2021 fiscal year compiled by Deloitte, one of the world's "Big Four" accounting firms, the number one in the "drugstore and pharmacy" sector was the U.S. company Walgreens, with sales reaching 122 billion dollars (about 180 trillion KRW). In the same ranking, the combined total of Welcia Holdings and Tsuruha Holdings ranked fifth.

This content was produced with the assistance of AI translation services.