Japanese pharmacy giant Matsukiyo in talks to merge with rival Cocokara

Photo: Nikkei Asian Review

Japanese drugstore giant MatsumotoKiyoshi Holdings said it was starting talks to merge with rival Cocokara Fine Inc, possibly creating the country’s biggest chain of discount pharmacies with nearly $10 billion in annual sales.

Cocokara Fine shares briefly jumped 9% on Wednesday after the company said it had decided to negotiate a potential merger with the bigger MatsumotoKiyoshi. It had considered a tie-up with another drugstore chain, Sugi Holdings, but chose an offer from MatsumotoKiyoshi instead, it said in a statement.

The companies said they could not comment on details of negotiations, such as possible terms and deadlines for the talks.

Known as “Matsukiyo”, MatsumotoKiyoshi started as a mom-and-pop pharmacy in the 1930s and has grown rapidly through aggressive store openings and acquisitions. It was a pioneer in drugstores’ sales of discount cosmetics, allowing consumers to more casually sample products.

It and other major drugstores have also expanded into snacks, soft drinks, and liquor, dealing a blow to the country’s convenience stores and supermarkets. But drugstores, like the rest of Japan’s retail industry, are now grappling with a dwindling workforce and tough price competition.

“It will not be easy to overcome business challenges on our own, and therefore it is appropriate for us to merge,” Cocokara said in a statement.

“By combining with MatsumotoKiyoshi Holdings … there is a chance of creating major synergies such as improving work efficiency and developing private brand products.”

A merged company will earn over 1 trillion yen ($9.4 billion) in annual sales, topping sector leaders Welcia Holdings and Tsuruha Holdings.

Shares in Cocokara Fine surged to their highest since November 2018, and were up 1.3% in mid-afternoon trade, while MatsumotoKiyoshi shares fell 2%.

Shares in Sugi, which said it would look for other potential partners, rose around 2%.

Reuters 

 

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In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

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