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$2.1-Billion Acquisition Of Japan Cosmetics Firm Ci:Z Offered By Johnson & Johnson

$2.1-Billion Acquisition Of Japan Cosmetics Firm Ci:Z Offered By Johnson & Johnson
With the aim of strengthening its international innovation pipeline, 230 billion yen (US$2.05 billion) in cash would be expended by U.S. healthcare conglomerate Johnson & Johnson to acquire the remaining of the outstanding shares that it still does not own in the Japanese skincare firm Ci:z Holdings Co Ltd. This acquisition was announced by J&J on Tuesday.
In addition to acquiring the innovative capabilities, this deal would also grant J&J direct and instant ownership of popular brands such as Dr.Ci:Labo, Labo Labo and Genomer.
This is the latest addition of a number of deals in the cosmetics industry in Asia where larger global giants in the industry seek top expand their portfolio of products and capabilities in the lucrative region of Asia including the lucrative $53.5 billion Chinese market. The smart online marketing strategies and the quick turnaround periods for launch of new products for Asian brands \is what western giants are seeking to leverage through the acquisitions.
In may this year, South Korean makeup and fashion firm Nanda was announced to be bought by France’s L’Oreal SA. Last year, cosmetics firm Carver Korea was bought for $2.7 billion by Unilever NV. Investments in South Korean cosmetics firms have been made by the likes of LVMH and Estee Lauder Companies Inc.
J&J said in a statement  the deal will also include the shares of the Japanese firm’s founder Yoshinori Shirono and the US company has proposed to pay 5,900 yen per Ci:z share which is  a 55 per cent premium over Tuesday’s closing price.
According to Refinitiv data, with a 27.96 per cent stake, the largest shareholder of the dermo-cosmetics specialist firm is CIC Corp which is a fund owned by the founder.
19.9 per cent shares of the company are owned by J&J which makes it the second largest stakeholder of the Japanese company. It has acquired the shares in 2016.  The ownership allowed J&J distribution rights of the company’s products outside of Japan. The large consumer database of the collagen gel and medical skin products maker would be one of the important asserts that J&J would gain from the acquisitions., according to experts.
“This transaction will maximize value creation ... by bringing in an agile innovation model and rapidly accelerating sales through our global commercialization expertise,” Jorge Mesquita, worldwide chairman at Johnson & Johnson’s consumer division, said in the statement.
In recent years, J&J has undertaken a strategy to se3ll off its loss making lagging business units such as its diabetes care devices, and is now completely focused on the profit making and better-performing units and product development. The tender offer for the acquisition of the shares of the Japanese company by J&J is expected to take place on Oct. 29.

Christopher J. Mitchell

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