Ha Tay Pharmaceutical Company (Hataphar) in mid-August approved the plan to issue 8.4 million shares for individual offering to Tokyo-headquartered Aska Pharmaceutical Co., Ltd. The transaction is expected to be completed in the next few months, with proceeds of $7.62 million.

In 2020, Aska acquired 24.9 per cent of Hataphar. With the new move, the Japanese firm will increase its stake to 32.56 per cent. In recent months, the healthcare market has witnessed other merger and acquisition (M&A) deals. In early August, South Korea’s Dongwha Pharm acquired 51 per cent of Trung Son Pharma for $30 million. The acquisition, slated for completion in late October, aligns with the South Korean company’s ambitions to expand into the Southeast Asian pharmaceutical and beauty market.

Trung Son Pharma, founded in 1997, manages more than 140 pharmacy chain stores in Southern Vietnam and reported approximately $569.62 million in revenue last year. It has grown 46 per cent on average annually since 2019.

In July, SGX Mainboard-listed healthcare group Thomson Medical Group announced plans to acquire FV Hospital. Kiat Lim, executive vice chairman of Thomson Medical, said that Vietnam was a long-term strategy for the group, and it hoped to continue to invest holistically in the market beyond capital investment.

“We’re excited about the upcoming new wing of FV Hospital, which will expand our specialist centres in cancer treatment, gastroenterology, cardiology, and fertility medicine – to name a few. And we hope to continue to invest in FV Hospital so that we continue our leadership in delivering excellent, cutting-edge care,” Truong Thanh Son, founder of Trung Son Pharma, told VIR.

According to the latest update to PwC’s Global M&A Trends in Health, pharmaceuticals, life sciences, and healthcare services continue to attract substantial investor interest, and it expects this to continue during the latter half of 2023.

“Large-cap pharma companies continue to pursue investments in midsized biotech companies to bridge pipeline gaps, while portfolio reviews and divestitures of non-core assets remain top of mind. Private equity firms are eager to deploy their dry powder by acquiring innovative healthcare assets,” the report stated.

Experts attributed the market’s attraction to a rising middle class, acceleration of digital transformation, rising healthcare demands, an ageing population, and challenges in the public hospital system.

Nguyen Thu Cuc, chairman of the board at Thu Cuc Medical & Beauty JSC, said, “The potential for private healthcare development in Vietnam is huge. With 100 million people, rising incomes and intellectuals, and growing demand for high-quality and well-served medical services, it is certainly an inevitable trend.”

Many M&A transactions in the healthcare market have been reported in recent year, with some showing signs of success. Since taking over Pymepharco in 2020, Stada Service Holdings B.V has opened new directions for comprehensive and sustainable development. Pymepharco, as an official member of Stada Group, is mainly involved in manufacturing and trading of prescription drugs and functional products.

In February, an agreement between Gigamed and Pymepharco-Stada marked a significant expansion in the latter in terms of go-to-market approach, coverage, and customer value management. Gigamed now provides logistics services and sales force platform in the retail market including independent pharmacies, pharmacy chains, and other healthcare providers.

“The partnership with Gigamed will help Stada seize new opportunities, accelerate growth, and expand its consumer healthcare business in the Vietnamese retail market,” said Christos Gallis, vice chairman of Stada Group and CEO of Pymepharco-Stada.

At Traphaco, with Daewoong being a strategic shareholder since 2018, the company has changed its business strategy towards focusing on technology transfer and an international market approach. Traphaco general director Tran Tuc Ma said, “The presence of the South Korean shareholder has brought about plenty of changes. The first and most considerable change was in the vision and strategy towards shifting to a more focused direction on new drugs.”

Despite signs of flourishing, experts said that the market needs more drivers to facilitate M&A deals in the months to come, with legal reform and market openness being among the key areas.

According to the PwC report, regulatory scrutiny has already caused delays in larger deals announced in the first half of 2023, prompting dealmakers to approach prospective transformative deals with caution.

Ngo Thanh Hai, lawyer at LNT & Partners, said, “High interest rates, challenging economic conditions, and a persistent gap between buyer and seller price expectations hampered some dealmaking. These issues are important drivers for dealmakers to make decisions,” he noted.