Robinsons Retail Holdings Inc. said Friday pharmaceutical unit South Star Drug Inc. acquired 100 percent of Cebu-based drugstore chain Rose Pharmacy Inc. for P4.5 billion.
RRHI, a unit of the Gokongwei Group, said in a disclosure to the stock exchange South Star bought Rose Pharmacy from Mulgrave Corp. B.V., a wholly-owned subsidiary of Dairy Farm International Holdings Ltd. A share purchase agreement was signed Friday.
Rose Pharmacy was established in 1952 as a family-run drugstore in Cebu City with the goal of providing quality and affordable medicines to communities.
Rose Pharmacy, which has more than 300 stores across the Visayas and Mindanao, posted net sales of nearly P9 billion in 2019.
“I am delighted that Rose Pharmacy will be part of our portfolio as it takes us back to our hometown in Cebu where my father and JG Summit Holdings and RRHI founder John Gokongwei Jr. started as an entrepreneur. Mr. John also admired Rose Pharmacy for its strong brand reputation in Visayas and Mindanao,” said RRRHI president and chief executive Robina Gokongwei-Pe.
“The deal also further bolsters our strategic partnership with Dairy Farm to strengthen our position in Philippine multi-format retailing. We first worked with Dairy Farm for the acquisition of Rustan Supercenters Inc. in 2018, which deepened our footprint in the premium supermarket space. Our acquisition of Rose Pharmacy yet again offers ripe opportunities for innovation through strategic synergies,” she said.
The transaction is expected to strengthen RRHI’s drugstore business. Excluding The Generic Pharmacy, RRHI was operating 520 drug stores as of end-June across the country.
“Rose Pharmacy is a very strategic addition to our drugstore portfolio with its highly-regarded brand in VisMin and complementary network to Southstar Drug’s strong presence in Luzon and Metro Manila. Together, we can leverage our scale and synergies to drive wider product assortment, better customer service and offer greater value to our customers across Philippines when they need it most,” South Star Drug managing director David Goh said.
Hong Kong-based Dairy Farm initially acquired 49-percent share in Rose Pharmacy in 2015. It increased its stake in the company to 100 percent in November 2018.
RRHI said net income in the first half declined 4.1 percent to P1.6 billion because of the impact of the COVID-19 lockdown on various businesses.
The group had 1,890 retail outlets including supermarkets, drugstores, department stores, DIY stores, convenience stores and specialty stores as of end-June.
The share price of RRHI dropped 2.6 percent Friday to close at P65.50.