Taekwang Industrial will acquire mid-sized drugmaker Dong Sung Bio Pharm by forming a consortium with United Asset Management (UAMCO).
Taekwang Industrial said on the 14th it held a board meeting on the 7th and approved the plan to acquire Dong Sung Bio Pharm. Founded in 1957, Dong Sung Bio Pharm is a mid-sized pharmaceutical company that produces the antidiarrheal "Jeongro-hwan," the hair dye "Seven-Eight," and the hair loss treatment "Minoxidil."
Taekwang Industrial plans to use the acquisition of Dong Sung Bio Pharm to expand its business portfolio from its existing chemical and textile-focused structure into beauty and healthcare. After establishing the cosmetics subsidiary "SIL," Taekwang Industrial has now built a beauty and healthcare platform that spans pharmaceuticals, hair colorants, derma and hair care beyond cosmetics through this acquisition of Dong Sung Bio Pharm.
Taekwang Industrial also plans to strengthen its mid- to long-term growth engines by increasing investment in research and development (R&D) at Dong Sung Bio Pharm. The anticancer drug candidate "Phonogène" under development by Dong Sung Bio Pharm is currently in phase 2 clinical trials, and Taekwang Industrial's investment is expected to provide a more stable environment for new drug development.
Taekwang Industrial will also work in tandem to improve the financial structure through collaboration with United Asset Management, which is participating in the consortium. Through Picoztech and other firms in which United Asset Management is investing, the company plans to review shifting production to outsourcing (ODM/OEM) and optimize production lines, while improving profitability by making selling and administrative expenses more efficient. In particular, sales channels held by Taekwang Industrial affiliates, such as home shopping, media commerce, and hotels, will be used as commercialization and marketing infrastructure for products.
A Taekwang Industrial official said, "This acquisition is a strategic decision to strengthen competitiveness in the K-beauty market by combining Dong Sung Bio Pharm's research and development experience and hair care expertise with Taekwang Industrial's cosmetics business strategy," adding, "We will gradually complete the value chain from product planning to manufacturing and distribution to build a foundation for mid- to long-term growth."