August 14, 2019 / 3:35 AM / 10 days ago

Japan pharmacy Cocokara surges 7% after merger talk report

TOKYO (Reuters) - Shares in Japan’s Cocokara Fine Inc (3098.T) jumped nearly 7% on Wednesday after a media report that it was in talks to be acquired by a larger rival to create the country’s biggest discount drugstore chain with $9.4 billion in annual sales.

The Nikkei newspaper reported that Cocokara is negotiating a merger with MatsumotoKiyoshi Holdings (3088.T), which started as a mom-and-pop pharmacy in the 1930s and has grown rapidly through aggressive store openings and acquisitions.

The two companies were not immediately available to comment.

A merged company will have 1 trillion yen ($9.4 billion) in annual sales, topping the sector leader Welcia Holdings (3141.T).

Shares in Cocokara Fine surged to their highest since November 2018, while MatsumotoKiyoshi shares rose 0.6%, in line with the broader market .N225.

Widely known as “Matsukiyo”, MatsumotoKiyoshi has offered heavy discounts and also expanded into snacks, soft drinks, and liquor, dealing a heavy blow to the country’s convenience stores and supermarkets.

Reporting by Ritsuko Ando; Editing by Muralikumar Anantharaman

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