Mitsubishi Chemical Holding’s pharmaceutical unit is to acquire Tanabe Seiyaku. This is viewed as the first step in a wave of consolidation expected to sweep through Japan’s drugs industry.
The all-stock deal is valued at 523 billion yen. It will create a new company, Mitsubishi Tanabe Pharma Corp, which will be the fifth largest drugmaker in terms of sales (407.8 billion yen) and operating profit (63.8 billion yen). The merger is expected to be completed by October 1.
Explaining the rationale behind the deal, the two firms issued a statement saying, “pharmaceutical companies that lag behind in terms of global competitiveness’ face being driven out of the industry altogether, and while most of the group’s R&D efforts will come from Tanabe, Mitsubishi will be looking to reinforce overseas business infrastructure.”