Dong-A Socio Holdings will reabsorb Dong-A Pharmaceutical, which was carved out through a physical split during its transition to a holding company structure in 2013, after 13 years. The move is intended to accelerate investment in new businesses and expansion into overseas markets by transforming the company into an operating holding company that directly manages Dong-A Pharmaceutical’s businesses, including Bacchus, over-the-counter (OTC) drugs, healthcare products, and derma cosmetics.

Dong-A Socio Holdings announced that on the morning of the 23rd its board of directors resolved to merge its wholly owned subsidiary Dong-A Pharmaceutical through an absorption-type merger. The effective date of the merger is October 1.

After the merger, Dong-A Socio Holdings will remain as the surviving entity and the Dong-A Pharmaceutical corporation will be dissolved. As Dong-A Socio Holdings owns 100% of Dong-A Pharmaceutical’s shares, the merger ratio has been set at 1 to 0. The merger will be carried out as a small-scale merger without capital increase through new share issuance, so there will be no changes to the existing shareholder structure and shareholding ratios, or to the number of shares outstanding and capital stock.

The core of this merger is the transition from a pure holding company focused on subsidiary management and investment to an operating holding company that directly conducts Dong-A Pharmaceutical’s consumer healthcare business.

Since its transition to a group holding company in 2013, Dong-A Socio Holdings has operated each business subsidiary separately. At that time, the OTC drug manufacturing and sales business was separated into Dong-A Pharmaceutical through a physical split. Dong-A Pharmaceutical was established in March of the same year and has been producing products at plants in Icheon, Cheonan, and Dangjin.

Since then, Dong-A Pharmaceutical has expanded its business in areas including Bacchus, OTC drugs, health functional foods and consumer healthcare products, and derma cosmetics, becoming a major cash generator for the group.

Dong-A Socio Holdings determined that, amid intensifying competition in both global and domestic healthcare markets, it is necessary to bring Dong-A Pharmaceutical’s business competitiveness and cash generation capacity inside the holding company.

After the merger, Dong-A Pharmaceutical’s business operations, the group’s new investments, the securing of new growth engines, and subsidiary management will all be carried out within a single legal entity. The company plans to streamline its governance structure and accelerate investment execution by centralizing decision-making authority and accountability for business performance in the board of directors and management of Dong-A Socio Holdings.

As Dong-A Pharmaceutical is already a consolidated subsidiary, the impact of the merger on the group’s overall consolidated results will be limited. However, after the merger, Dong-A Pharmaceutical’s business performance and operating cash flow will be directly reflected in Dong-A Socio Holdings’ separate financial statements, enabling the integrated entity to use them directly as funding for investments such as new businesses and mergers and acquisitions.

On a separate basis, Dong-A Pharmaceutical recorded sales of KRW 726.3 billion and operating profit of KRW 86.9 billion in 2025.

Through this merger, Dong-A Socio Holdings also expects to reduce the holding company discount factor arising from the potential for overlapping listings of major subsidiaries and to realize a re-rating of its corporate value in the market.

A Dong-A Socio Holdings representative stated, “This small-scale merger is both a continuation of the outcomes of the 2013 transition to a holding company structure and a strategic decision to leap forward as a leading company in the global healthcare market,” adding, “Based on integrated resources and capital, we will expand investments to secure new growth engines and thereby enhance both corporate value and shareholder value.”

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