Aeon Co. is set to merge its Japanese drugstore unit, Welcia Holdings, with rival Tsuruha Holdings to strengthen its position in the domestic market and expand its drugstore operations across Southeast Asia.
Merger Details
The three companies announced their intent to finalize the merger terms by the end of 2027. This strategic business integration aims to enhance the health and wellness offerings for consumers in Japan, the ASEAN region, and other global markets.
As part of the merger process, Aeon has agreed to acquire an additional 14% stake in Tsuruha from Hong Kong-based asset manager Oasis Management for 102.3 billion yen ($679.7 million). Aeon currently holds a 14% stake in Tsuruha.
Industry Landscape
Upon completion of the merger, Welcia and Tsuruha’s combined annual revenue would exceed Y2 trillion, surpassing that of the third-largest drugstore operator, MatsukiyoCocokara.
The domestic drugstore sector has experienced growth in recent quarters, fueled by a rebound in shopper numbers, including foreign tourists, post the pandemic-related downturn. However, intense competition from new store openings and industry consolidation poses challenges, compounded by Japan’s shrinking population.
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