Bukwang Pharmaceutical (003000.KS) is set to acquire Korea Union Pharmaceutical. The acquisition is expected to expand Bukwang's manufacturing capabilities beyond its existing solid oral dosage forms to include antibiotics and injectables.
Bukwang Pharmaceutical announced on the 17th that it has been selected as the preferred bidder for the pre-approval merger and acquisition in Korea Union Pharmaceutical's rehabilitation proceedings at the Seoul Rehabilitation Court. Under the "stalking horse" method, Bukwang will be confirmed as the final acquirer if there are no additional bidders or no bidders offering terms more favorable than those of the preferred bidder.
Once the acquisition is finalized, Bukwang Pharmaceutical's drug manufacturing capacity will increase by approximately 30%. Korea Union Pharmaceutical possesses liquid injectable production facilities capable of producing more than twice the volume of Bukwang's current capacity. Additionally, Bukwang will secure cephalosporin antibiotic manufacturing lines and dedicated cephalosporin-class antibiotic production facilities and product licenses that the company previously lacked.
"This acquisition is aimed at reinforcing the production capacity of our existing Ansan plant, and we expect profitability improvements by bringing in-house the products currently outsourced to external contract manufacturers," a Bukwang Pharmaceutical official said. "We decided on the acquisition because Korea Union also has a portfolio that can generate synergies with Bukwang, including antibiotic lines."
The official added, "Given that Bukwang's current management has experience turning a loss-making company into a profitable one, we believe Korea Union Pharmaceutical can also normalize its performance within a short period."
Bukwang Pharmaceutical previously held a board meeting on March 28 this year and conducted a 100 billion won rights offering. At the time, the company stated that "the funds raised through the rights offering will be used to expand existing manufacturing facilities to address drug shortage issues." A portion of the funds will also be used for acquiring manufacturing equipment and promoting research and development activities.
