Dong-A Socio Holdings to Absorb Dong-A Pharmaceutical, Transitioning to an “Operating Holding Company” Structure

Simplifying Governance Structure and Enhancing Management Efficiency
Strengthening Corporate Value by Resolving Dual Listing Discount

Dong-A Socio Holdings is transitioning from a pure holding company to an “operating holding company,” aiming to become a leading player in the global healthcare market. This restructuring comes more than ten years after the company initially converted to a holding company in 2013. The decision allows the holding company to directly capture the cash-generating capabilities of its subsidiaries and invest in new growth drivers.

Exterior view of the Dong-A Socio Holdings and Dong-A Pharmaceutical office building. Dong-A Socio Holdings

Dong-A Socio Holdings announced on the morning of July 23 that its board of directors resolved to merge Dong-A Pharmaceutical, its wholly-owned subsidiary, through an absorption-type merger. The scheduled merger date is October 1, 2026. The merger will be carried out as a small-scale merger without the issuance of new shares, and thus, there will be no changes to the shareholder structure or shareholding ratios after the completion.

It is evaluated that, since converting to a holding company in 2013, Dong-A Socio Holdings has successfully achieved its goals by strengthening the expertise of each subsidiary business over the past decade. In particular, Dong-A Pharmaceutical, driven by the success of “Bacchus,” has established itself as the group’s major cash cow through consistent growth in over-the-counter drugs, healthcare products, and derma-cosmetics.

The merger is interpreted as a response to the growing need to engage directly in both business operations and investments amid intensifying competition in the global and domestic healthcare markets. By internalizing Dong-A Pharmaceutical’s consumer healthcare competitiveness and stable cash generation, Dong-A Socio Holdings seeks to transform into an operating holding company that simultaneously manages operations, new investments, the development of new growth engines, and subsidiary oversight.

Dong-A Socio Holdings expects that responsible management will be strengthened by concentrating the group’s capabilities on core business areas, and that decision-making authority and performance accountability will be unified within the board of directors and management of the surviving company. This is expected to establish a prompt and responsible management system based on a single governance structure. The company also anticipates that the merger with its 100% subsidiary will resolve the holding company discount resulting from concerns over dual listings and enhance corporate value through a revaluation of its valuation.

The integrated entity will leverage the brand value and key infrastructure accumulated by Dong-A Pharmaceutical to diversify e-commerce channels, enter global retail chains, and pursue brand collaborations, thereby expanding its presence in overseas markets. The company plans to foster proven global consumer healthcare brands, increase the proportion of overseas sales, and advance as a global consumer healthcare company.

A Dong-A Socio Holdings representative said, “This small-scale merger not only continues the achievements made from the holding company conversion in 2013, but also reflects our determination to become a leading company in the global healthcare market. Based on our integrated resources and capital, we will expand investments to secure new growth engines, maximizing both corporate and shareholder value at the same time.”

The merger was finalized by resolution of the board of directors. Before the merger date, Dong-A Socio Holdings plans to convene an extraordinary general meeting of shareholders to address amendments to the articles of incorporation and the appointment of directors related to the transition to an operating holding company structure.

This content was produced with the assistance of AI translation services.