September 22, 2017 / 9:43 AM / a year ago

Ping An Insurance buying 10 percent stake in Japan drugmaker Tsumura for $244 million

TOKYO (Reuters) - Japanese drugmaker Tsumura & Co (4540.T) said on Friday Ping An Insurance Group Co of China Ltd (601318.SS) (2318.HK) will become its biggest shareholder by acquiring a 10 percent stake for 27.3 billion yen ($243.7 million).

Company logo of Ping An Insurance Group is shown at a news conference following the company's announcement of its annual results in Hong Kong, China in this March 16, 2016 file photo. REUTERS/Bobby Yip/File photo

Tsumura is well known in Japan as a prescription drugmaker specialized in “kampo” herbal medicine, which traces its roots back to China.

In a statement, Tsumura, which has annual revenue of about $980 million, said it will place newly issued shares and treasury stock to Ping An for 3,559.5 yen a share, a 9.4 percent discount to Friday’s closing price.

The deal is set to close on Oct. 13, the company said.

Tsumura said the two companies are planning to set up joint ventures in procurement of herbal medicine materials, production and sales of traditional Chinese medicine in China.

The Japanese company said it relies on imports from China for about 80 percent of herbal medicine materials, and that securing stable procurement is becoming critical as growing demand for kampo and Chinese medicine have driven up prices of herbal materials.

Reporting by Taiga Uranaka; Editing by Muralikumar Anantharaman

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