TOKYO -- China's Ping An Insurance Group will take a 10% voting stake in Tsumura & Co., the Japanese traditional drugmaker said Friday, in a tie-up that serves both sides' desire to push further into promising markets.
Ping An will become Tokyo-based Tsumura's largest shareholder through a 27.3 billion yen ($243 million) private placement of shares.
The Chinese insurer seeks to grow its health care and pharmaceuticals businesses, which can translate into insurance policy sales. Tsumura hopes to use Ping An's customer base as a springboard for diving deeper into the Chinese consumer market, which it entered in 2016.
The two companies will establish a joint venture in China that will build a facility to process ingredients in traditional Chinese medicine and develop processing technology. Their respective stakes will be determined later. The pair will also establish a research center mainly studying traditional Chinese medicine.
Shenzhen-based Ping An is one of China's four major insurance groups. The company has an app used by more than 100 million people that lets them consult a doctor online. The Chinese insurer is also investing in drugmakers and will make use of Tsumura's know-how in drug production.
Many of the ingredients in the remedies Tsumura sells in Japan are produced in China. With prices of these ingredients soaring on growing demand for traditional medicine in both countries, Tsumura also aims to acquire new fields for cultivation.
Tsumura is Japan's largest maker of kampo, or remedies rooted in traditional Chinese medicine, boasting an 80% share of the domestic market.