Taekwang Industries to acquire Dongsung Pharmaceutical in K-beauty push

SEOUL, January 14 (AJP) - Taekwang Industries said Wednesday it will acquire mid-sized drugmaker Dongsung Pharmaceutical through a consortium with United Asset Management Co., known as UAMCO, marking its latest move to diversify beyond its core chemicals and textiles businesses.

Taekwang's board approved the acquisition at a meeting held Jan. 7. Dongsung produces a range of consumer health and personal-care products.

Taekwang said the deal is intended to accelerate its expansion into beauty and health care. The group has recently outlined plans to enter cosmetics and household goods and established a cosmetics-focused unit, SIL. The acquisition of Dongsung would allow Taekwang to build what it described as a “beauty and health care platform” spanning both cosmetics and pharmaceuticals.

The company plans to build on Dongsung’s stable revenue base centered on over-the-counter drugs and hair-care products, while applying its own brand management, product planning and distribution capabilities to improve competitiveness.

Working with UAMCO, Taekwang plans to improve Dongsung’s financial structure by reviewing a shift toward outsourced manufacturing, including ODM and OEM models, and by optimizing production lines through UAMCO-backed companies such as Picostec. The group also aims to raise profitability by streamlining selling and administrative expenses.

A Taekwang official said the acquisition is a strategic bid to strengthen competitiveness in the K-beauty market by combining Taekwang’s cosmetics strategy with Dongsung’s research capabilities and expertise in hair-care products.

The official added that the company aims to gradually complete an integrated value chain, from product planning and manufacturing to distribution, to establish a foundation for mid- to long-term growth.