Expert on Japan Retail and Consumer Markets, JapanConsuming

Michael Causton

Expert on Japan Retail and Consumer Markets

Real Insight on Japanese Consumer Markets

JapanConsuming

JapanConsuming is a specialist research firm producing intelligence on Japanese retail and consumer markets. Founded in 2000, JapanConsuming has become the leading provider of insights on Japanese retailers and consumer trends to retailers, brands, government agencies and investors. As well as a highly regarded monthly report on the market, JapanConsuming produces in-depth reports on retail sectors, seminars on key trends and telephone consulting to investors on trends and retailers.

JapanConsuming was founded by Michael Causton and Roy Larke. 

Event-Driven

<ul>
<li>Aeon will almost definitely increase its stake in Tsuruha Holdings, which on its own will catalyse drugstore competitors to consider their mergeable options.</li>
<li>Tsuruha MAY merge with Welcia under Aeon and just talk of this will catalyse drugstore competitors even more.</li>
<li>But the ongoing fusion of drugstore retailing and FMCG formats like supermarkets and convenience stores, will also spur the entire FMCG sector to respond to Aeon's massive potential dominance.</li>
</ul>


Aeon will almost definitely increase its stake in Tsuruha Holdings, which on its own will catalyse drugstore competitors to consider their mergeable options.
Tsuruha MAY merge with Welcia under Aeon and just talk of this will catalyse drugstore competitors even more.
But the ongoing fusion of drugstore retailing and FMCG formats like supermarkets and convenience stores, will also spur the entire FMCG sector to respond to Aeon's massive potential dominance.


Aeon (Maybe) Gets Tsuruha, Could Trigger Wave of Mergers in the Sector (And Beyond)

IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

<ul>
<li>
<a href="https://www.smartkarma.com/entities/aeon-co-ltd" target="_blank" data-smartkarma-citation="entities:3:1" rel="noopener">Aeon Co Ltd (8267 JP)</a>, <a href="https://www.smartkarma.com/entities/tsuruha-holdings-inc" target="_blank" data-smartkarma-citation="entities:9536:1" rel="noopener">Tsuruha Holdings (3391 JP)</a> and <a href="https://www.smartkarma.com/entities/welcia-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:20895:1" rel="noopener">Welcia Holdings (3141 JP)</a> have announced an alliance to establish the largest drugstore alliance in Japan by December 2027.</li>
<li>Aeon will carry out several Tsuruha transactions – buy Oasis 13.58% stake at JPY15,500 per share and, on receiving regulatory approval, reach 27.17% of the voting rights.  </li>
<li>The agreements involve merging Tsuruha and Welcia through a share exchange offer and Aeon subsequently increasing its Tsuruha voting rights from 27.17% to less than 51%. </li>
</ul>



Aeon Co Ltd (8267 JP), Tsuruha Holdings (3391 JP) and Welcia Holdings (3141 JP) have announced an alliance to establish the largest drugstore alliance in Japan by December 2027.
Aeon will carry out several Tsuruha transactions – buy Oasis 13.58% stake at JPY15,500 per share and, on receiving regulatory approval, reach 27.17% of the voting rights.  
The agreements involve merging Tsuruha and Welcia through a share exchange offer and Aeon subsequently increasing its Tsuruha voting rights from 27.17% to less than 51%. 


Aeon (8267 JP), Tsuruha (3391 JP) And Welcia (3141 JP)’s Long-Dated Plan

<ul>
<li>The possible merger between Welcia and Tsuruha under Aeon has been talked about for years despite concerns from both drugstores, but may now happen.</li>
<li>But calling these retailers drugstores is increasingly a misnomer: FMCG-drugstores is better because they and many others in the sector, increasingly compete with FMCG retailers like supermarkets and even CVS.</li>
<li>This evolution is rapid so the merits of a deal make more sense when we view it from a sector five years in the future than how it is today.</li>
</ul>


The possible merger between Welcia and Tsuruha under Aeon has been talked about for years despite concerns from both drugstores, but may now happen.
But calling these retailers drugstores is increasingly a misnomer: FMCG-drugstores is better because they and many others in the sector, increasingly compete with FMCG retailers like supermarkets and even CVS.
This evolution is rapid so the merits of a deal make more sense when we view it from a sector five years in the future than how it is today.


Aeon, Welcia and Tsuruha: Creating an FMCG Behemoth

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

<ul>
<li>Over the weekend there was an article in the Nikkei saying that <a href="https://www.smartkarma.com/entities/tsuruha-holdings-inc" target="_blank" data-smartkarma-citation="entities:9536:1" rel="noopener">Tsuruha Holdings (3391 JP)</a> and <a href="https://www.smartkarma.com/entities/welcia-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:20895:1" rel="noopener">Welcia Holdings (3141 JP)</a> were considering a merger. Other media outlets followed.</li>
<li>This has been a possible outcome. <a href="https://www.smartkarma.com/entities/aeon-co-ltd" target="_blank" data-smartkarma-citation="entities:3:1" rel="noopener">Aeon Co Ltd (8267 JP)</a> owns 51% of Welcia, 13.6% in Tsuruha, and is negotiating to buy another 13% in Tsuruha from Oasis.</li>
<li>This would create a behemoth. ¥2.2trln in revenues vs ¥1trln for <a href="https://www.smartkarma.com/entities/matsukiyococokara-co" target="_blank" data-smartkarma-citation="entities:2259:1" rel="noopener">MatsukiyoCocokara (3088 JP)</a>. It would be 25% of the market. Questions will be asked about concentration. </li>
</ul>


Over the weekend there was an article in the Nikkei saying that Tsuruha Holdings (3391 JP) and Welcia Holdings (3141 JP) were considering a merger. Other media outlets followed.
This has been a possible outcome. Aeon Co Ltd (8267 JP) owns 51% of Welcia, 13.6% in Tsuruha, and is negotiating to buy another 13% in Tsuruha from Oasis.
This would create a behemoth. ¥2.2trln in revenues vs ¥1trln for MatsukiyoCocokara (3088 JP). It would be 25% of the market. Questions will be asked about concentration. 


Tsuruha (3391) And Welcia (3141) - Aeon Tsuruha Stake Buy Followed by Merger?

Equity Bottom-Up

<ul>
<li>
<a href="https://www.smartkarma.com/entities/welcia-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:20895:1" rel="noopener">Welcia Holdings (3141 JP)</a> and <a href="https://www.smartkarma.com/entities/tsuruha-holdings-inc" target="_blank" data-smartkarma-citation="entities:9536:1" rel="noopener">Tsuruha Holdings (3391 JP)</a>, the country’s leading drugstore chains, are both looking to expand quickly in Kyushu after only entering the market recently. </li>
<li>This won’t be easy. Kyushu is full of discount retailers led by one of the best discounters, <a href="https://www.smartkarma.com/entities/cosmos-pharmaceutical-corp" target="_blank" data-smartkarma-citation="entities:3797:1" rel="noopener">Cosmos Pharmaceutical (3349 JP)</a>, which is also a leading drugstore chain.</li>
<li>But building a significant market share in the Kyushu market is crucial to competing nationally with these emerging discount leaders.</li>
</ul>



Welcia Holdings (3141 JP) and Tsuruha Holdings (3391 JP), the country’s leading drugstore chains, are both looking to expand quickly in Kyushu after only entering the market recently. 
This won’t be easy. Kyushu is full of discount retailers led by one of the best discounters, Cosmos Pharmaceutical (3349 JP), which is also a leading drugstore chain.
But building a significant market share in the Kyushu market is crucial to competing nationally with these emerging discount leaders.


Japan

SUNDRUG CO., LTD. operates an outlet drug store chain primarily in the Tokyo area.  The Company sells mainly medicines, cosmetics, baby care products, and household utensils.  Sundrug supplies merchandise to franchise stores.  The Company also operates a real estate business.

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Sundrug Co Ltd (9989 JP)

Aeon (Maybe) Gets Tsuruha, Could Trigger Wave of Mergers in the Sector (And Beyond)

Aeon's potential increased stake in Tsuruha Holdings and possible merger with Welcia will likely prompt drugstore competitors to consider their...

Michael Causton

Aeon (8267 JP), Tsuruha (3391 JP) And Welcia (3141 JP)’s Long-Dated Plan

We prefer to play these transactions through Tsuruha due to a valuation benchmark (Aeon’s acquisition from Oasis at JPY15,500) and undemanding...

Arun George

Aeon, Welcia and Tsuruha: Creating an FMCG Behemoth

Merger between Welcia and Tsuruha under Aeon may happen as FMCG-drugstores increasingly compete with supermarkets and CVS, so we need to view the...

Michael Causton

Tsuruha (3391) And Welcia (3141) - Aeon Tsuruha Stake Buy Followed by Merger?

Over the weekend we have news suggesting Aeon is pushing Tsuruha and Welcia towards a merger after buying Oasis' Tsuruha stake. Both stocks are up....

Travis Lundy

Welcia Challenges Cosmos in Kyushu

Kyushu has become a hotbed of retail competition, especially in discount and drugstores. Aeon is determined to undermine the local champions,...

Michael Causton

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Aeon (Maybe) Gets Tsuruha, Could Trigger Wave of Mergers in the Sector (And Beyond)

​Aeon's potential increased stake in Tsuruha Holdings and possible merger with Welcia will likely prompt drugstore competitors to consider their...

Michael Causton

Aeon (8267 JP), Tsuruha (3391 JP) And Welcia (3141 JP)’s Long-Dated Plan

We prefer to play these transactions through Tsuruha due to a valuation benchmark (Aeon’s acquisition from Oasis at JPY15,500) and undemanding...

Arun George

Aeon, Welcia and Tsuruha: Creating an FMCG Behemoth

​Merger between Welcia and Tsuruha under Aeon may happen as FMCG-drugstores increasingly compete with supermarkets and CVS, so we need to view the...

Michael Causton

Tsuruha (3391) And Welcia (3141) - Aeon Tsuruha Stake Buy Followed by Merger?

Over the weekend we have news suggesting Aeon is pushing Tsuruha and Welcia towards a merger after buying Oasis' Tsuruha stake. Both stocks are up....

Travis Lundy

Welcia Challenges Cosmos in Kyushu

Kyushu has become a hotbed of retail competition, especially in discount and drugstores. Aeon is determined to undermine the local champions,...

Michael Causton

Aeon's potential increased stake in Tsuruha Holdings and possible merger with Welcia will likely prompt drugstore competitors to consider their...

Merger between Welcia and Tsuruha under Aeon may happen as FMCG-drugstores increasingly compete with supermarkets and CVS, so we need to view the...