[THE INVESTOR] LG Household and Health Care announced on Nov. 2 that it will acquire an 80 percent stake in Tai Guk Pharmaceutical for 44.6 billion won (US$40.06 million).
The LG Group subsidiary was established in 1976, and is well-known for producing over-the-counter cosmetics, which account for 70 percent of its total sales. In 2016, its sales reached 60 billion won in 2016, but its net loss reached 800 million won.
Despite the losses, the firm decided to acquire the firm to take advantage of over 600 medicine related licenses owned by Tai Guk Pharmaceutical.
“We are considering to launch a separate dermocosmetics brand using licenses that Tai Guk has to meet increasing demand for cosmetics with medical or drug-like benefits,” a spokesperson told The Investor.
LG H&H also said that it plans to further expand its presence overseas, such as in North America, China and Southeast Asia by using Tai Guk’s three manufacturing facilities.
“One of the plants earned a good manufacturing practice certificate in the EU, which will be positive for our overseas expansion plans,” the company spokesperson added.
Another local cosmetics manufacturer TonyMoly in August attempted to buy a 43 percent stake in the pharma firm for 14 billion won. However, the deal collapsed after TonyMoly discovered that Tai Guk had failed to provide information about 7.3 billion won it received in government subsidies, which has to be paid back.
By Song Seung-hyun (email@example.com)