Yamanouchi to buy rivals Fujisawa for $7 billion
pharmafile | February 26, 2004 | News story | |Â Â Â
Japan's third largest pharmaceutical company Yamanouchi is to buy its national rival Fujisawa in a deal worth around $7.7 billion.
Rumours that the companies were considering a merger first surfaced in November, but Fujisawa president Hatsuo Aoki had continued to deny the speculation, insisting until the latest announcement that only the respective OTC businesses would merge.
The country's pharma companies have long been under pressure from investors to consolidate in order to maintain profitability and R&D productivity and compete with Western firms now making greater in-roads into Japan, the world's second biggest market.
The combined company will rank seventeenth overall in the global market with sales of around Y800 billion ($7.34 billion) with a portfolio including Yamanouchi's top seller, prostate treatment Harnal, which achieved sales of $1.44 billion in 2003 and Fujisawa's immunosuppressant Prograf, which earned $946 million.
The merger is proposed to take effect from April 2005 and will be financed through an exchange of stocks between shareholders.
"This is a forward-looking move to become a winner in the global market," said Mr Aoki. "We may still not be big enough to be a mega-player, but I believe we are now at the starting line."
Toichi Takenaka, Yamanouchi's current chief executive will lead the new company, with Mr Aoki taking the role of chairman. Despite Yamanouchi's clear dominance in the relationship, the new partners pledged other top appointments would not favour Yamanouchi staff and promised the new company would be a "completely new entity, which is neither Yamanouchi nor Fujisawa."
Analysts say the companies are a good fit in terms of products and presence in markets, with Fujisawa's strength in the US complemented by Yamanouchi's solid performance in Europe.
The merger will secure the companies the largest market share in their domestic market, but globally will remain behind Takeda as Japan's biggest pharma company.
