Kolmar Korea is to become a formidable player in the pharmaceutical industry by taking over CJ HealthCare, industry watchers said Wednesday.
CJ Cheiljedang, which owns the drugmaker 100 percent, said on Tuesday that it signed a deal with Kolmar Korea to sell CJ HealthCare to the cosmetics manufacturer.
After selecting Kolmar Korea as the preferred bidder earlier in the day, CJ Cheiljedang immediately agreed to sell the drugmaker for 1.31 trillion won ($1.1 billion). CJ Cheiljedang will dispose of CJ HealthCare stocks and investment securities on April 6.
Through the acquisition of CJ HealthCare, Kolmar Korea will beef up its capacity to develop new drugs and expand sales networks and continue the manufacturing and development of existing drugs.
Kolmar Korea’s annual revenue was about 200 billion won last year. Acquiring CJ HealthCare with 500 billion won yearly sales will make Kolmar become a large drugmaker. Some pharmaceutical sources predict that Kolmar Korea will be able to post 1 trillion won in sales in the future.
Kolmark Korea said it planned to enhance pharmaceutical business through CJ HealthCare takeover and become one of the top five local makers centering on new drug development by 2022.
The company also plans to expand its R&D capabilities to commercialize a new drug within the next 10 years, to become a globally competitive drugmaker.
Kolmar Korea aims to secure the largest production capacity in the Korean pharmaceutical industry by utilizing its two factories and three plants of CJ HealthCare.
The company also said it promised CJ HealthCare’s independent management to ensure long-term, stable growth, rather than to seek short-term results.
“If our contract manufacturing organization(CMO) business integrates with CJ HealthCare’s business in prescription drugs, health, and beauty products, our company will be able to become a comprehensive pharmaceutical firm,” said an official at Kolmar Korea.
He went on to say, “With the successful acquisition, our company has a balance in three areas -- cosmetics, pharmaceuticals and healthy food. This platform, although rare in the world, will boost our global competitiveness.”