Largest M&A in Local Bio Industry
Kolmar Korea acquires CJ HealthCare, the 10th-largest pharmaceutical company in South Korea, for approximately 1.3 trillion won (US$1.1 billion). This deal can be the largest in the M&A history of the local biotech industry.
A giant pharmaceutical company with at least one trillion won in sales is expected to result from the acquisition. “Kolmar Korea, which is the largest OEM manufacturer in the local cosmetics industry, is expected to beef up its medical cosmetics business based on the acquisition,” said an industry insider, adding, “At the same time, Kolmar Korea is likely to expand the scope of its business to cover every part of healthcare by expanding CJ HealthCare’s pharmaceutical business and functional health product lineup.”
Morgan Stanley is the lead manager for the deal. On February 19, it signed a stock purchase agreement with Kolmar Korea so that CJ HealthCare shares, all of which are currently owned by CJ Cheil Jedang, can be sold in whole to Kolmar Korea.
Kolmar Korea has been selected as the preferred bidder by beating Hahn & Company. As the preferred bidder, Kolmar Korea is planning to discuss additional conditions such as a continuous use of the CJ brand and continuous transactions with CJ Group subsidiaries. It is also planning to maintain the employment of CJ HealthCare employees, which is one of CJ HealthCare’s preconditions for the acquisition.