Tsuruha Holdings (Tsuruha HD) and Welcia Holdings (Welcia HD) have announced a business integration through a share exchange, resulting in the creation of Japan’s largest drugstore group, with annual revenue exceeding 2 trillion yen and more than 5,600 stores. After integration, the group will rank among the largest in the world, with strong growth potential in pharmaceuticals, dispensing, and healthcare services.
This article provides a clear, business-focused explanation of the M&A background, strategic objectives, share exchange ratio, and upcoming schedule.
Executive Summary
- Tsuruha and Welcia will integrate through a share exchange, completing Japan’s largest drugstore M&A
- The combined entity will form a major group with approx. 2.3 trillion yen in annual sales and over 5,600 stores
- Industry consolidation is accelerating amid population decline, drug price revisions, and labor shortages
- Logistics integration, joint procurement, and IT platform unification are expected to generate around 50 billion yen in synergies over three years
- AEON will increase its voting rights to over 50%, further advancing its group strategy
Purpose of M&A (Background and Intentions of Tsuruha and Welcia)
Tsuruha HD: Business Development Background
Tsuruha HD began in Hokkaido and expanded nationwide through a combination of new store openings and acquisitions, growing into a company with annual sales exceeding 1 trillion yen. Beyond pharmaceuticals and daily necessities, the company has strengthened its food offerings and increased its presence as essential regional infrastructure.
Key characteristics:
- Community-focused store operations
- Comprehensive drugstore format including food and daily goods
- Strength in scale expansion through acquisitions
Welcia HD: Business Development Background
Welcia has expanded nationwide with the support of AEON Group’s logistics network and capital strength. Its signature strength lies in its high proportion of stores equipped with dispensing pharmacies, along with professional services such as medical support, elderly care, and counseling.
Key characteristics:
- High rate of in-store dispensing pharmacies
- Value-added services such as 24-hour operations and care support
- Potential for expansion using AEON’s international network
Objectives and Expected Outcomes of the Integration
1. Cost efficiency through economies of scale
- Reduced procurement costs through joint purchasing
- Integration of logistics centers and distribution networks
- Joint development of private-label (PB) products
2. Integration of digital and IT infrastructure
- Unified POS and inventory management systems for operational efficiency
- Advanced marketing using unified customer data
- Strengthening online prescriptions and e-commerce
3. Addressing population decline and drug price adjustments
- Stronger coordination with local medical systems
- Expansion of stores with dispensing pharmacies
- Transition toward a business model resilient to an aging society
4. Accelerated expansion in overseas (Asian) markets
Leveraging AEON’s overseas presence to strengthen drugstore expansion in ASEAN and China.
Acquisition Terms: Share Exchange Ratio and Key Evaluation Points
Welcia to become a wholly owned subsidiary through share exchange
This M&A will be executed through a share exchange (full subsidiary method).
After integration, Tsuruha HD will become the ultimate parent company, and Welcia HD will be delisted.
Share Exchange Ratio (Key Points)
Leveraging AEON’s overseas presence to strengthen drugstore expansion in ASEAN and China.
Acquisition Terms: Share Exchange Ratio and Key Evaluation Points
Welcia to become a wholly owned subsidiary through share exchange
This M&A will be executed through a share exchange (full subsidiary method).
After integration, Tsuruha HD will become the ultimate parent company, and Welcia HD will be delisted.
Share Exchange Ratio (Key Points)
- 1 Welcia HD share → 1.15 Tsuruha HD shares
- The ratio reflects Tsuruha HD’s planned 1-to-5 stock split
- A third-party institution calculated and verified the fairness of the ratio
AEON’s strengthened influence
- AEON plans to increase its voting rights in Tsuruha HD to 50.9% after integration
- Control will be further strengthened through additional share acquisition (TOB)
Full M&A Schedule
April 11, 2025: Formal signing of business integration and share exchange agreement
May 26–27, 2025: Integration approved at both companies’ shareholder meetings
September 1, 2025: Tsuruha HD executes 1→5 stock split
November 26, 2025: Final trading day for Welcia HD shares
November 27, 2025: Welcia HD delisted
December 1, 2025: Share exchange becomes effective (integration completed)
December 3, 2025: AEON launches tender offer (TOB)
January 6, 2026: Scheduled TOB end date
Conclusion: How Japan’s Largest Drugstore M&A Shapes the Future
The Tsuruha × Welcia integration is not merely about expanding scale. It represents a strategic initiative aimed at:
- Strengthening regional healthcare and dispensing services
- Developing overseas markets
- Building unified digital and IT foundations
Amid ongoing challenges—population decline, drug price reforms, and intensifying competition—this model, which combines scale and specialization, is expected to become a new benchmark for future drugstore M&A. For companies considering M&A or business restructuring, this case offers highly valuable insights.
