Japan's mid-sized drugmakers to merge for survival
Afp, Tokyo
Two medium-sized Japanese drugmakers, Mitsubishi Pharma and Tanabe Seiyaku, said Friday they would merge on October 1 to survive tough competition at home and expand into the growing global market. The merger will create Japan's fifth biggest pharmaceutical company in terms of revenue as their combined sales totaled 407.8 billion yen (3.4 billion dollars) in the year to March 2006, the two companies said in a statement. Mitsubishi Pharma Corp. is currently ranked ninth and Tanabe Seiyaku Co. 11th among Japan's drugmakers. "Tanabe Seiyaku and Mitsubishi Pharma will establish status as an international drugmaker by combining their strong capabilities to develop new medicines and accelerating business moves overseas," the statement said. "We will also aim to enhance our presence on the domestic market," it added. The statement warned that the government's policy to restrict prices of medicines in Japan would "weed out pharmaceutical companies which lag behind in the global competition." The new firm, called Mitsubishi Tanabe Pharma Corp., will be created with Tanabe taking over Mitsubishi Pharma. One Mitsubishi Pharma share will be exchanged for 0.69 of a Tanabe share in the process. Mitsubishi Pharma's parent company, Mitsubishi Chemical Holdings Corp., will take a stake of more than 50 percent in the merged firm and make it a subsidiary, the statement said. The new firm will aim to chalk up 470 billion yen in revenue in the year to March 2011.
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