Dongwha Pharm to buy Vietnamese pharmacy chain at $30 mn

South Korea's Dongwha Pharm announced on Thursday that it signed an agreement to acquire a 51% stake in Trung Son Pharma, a leading pharmacy chain in Vietnam. 

In a cash transaction of around 39.1 billion won ($30 million), Dongwha Pharm plans to obtain about 12.15 million shares of Trung Son. The acquisition, slated for October 31, aims to diversify Dongwha's operations via further investments.

Trung Son, founded in 1997, manages over 140 pharmacy chain stores in Southern Vietnam and reported approximately 74 billion won ($568 million) in revenue last year, highlighting a robust 46% average annual growth rate from 2019. The company offers a wide assortment of products including prescription and over-the-counter drugs, health supplements, cosmetics, medical devices, and health and beauty (H&B) products.

With over 1,000 pharmacists, Trung Son has significantly expanded its number of stores from 23 in 2018 to over 140 last year. A collaboration with Dongwha Pharm aims to further amplify its retail presence to 460 stores by 2026.

Dongwha Pharm intends to penetrate the Vietnamese market with its portfolio of over-the-counter drugs such as Whal Myung Su, Each Paste, and Pancold. Taking into account the surging demand for vitamin, red ginseng, and K-beauty-related products in Vietnam, Dongwha plans to bolster its product offerings with health supplements and cosmetics.

"This acquisition is a significant step towards our strategic expansion into the Southeast Asian pharmaceutical and beauty markets," a Dongwha source said. "We are poised to establish ourselves as a front-runner in the K-Pharma and H&B domains."

Write to In-Hyuk Park at hyuk@hankyung.com