Foreign M&A heats up in Vietnam's $10B pharma market: DHG in focus

Overview

The Vietnamese pharmaceutical market is experiencing a surge in foreign M&A activity, with major deals including Taisho Pharmaceutical’s acquisition of DHG (Dược Hậu Giang) and STADA’s purchase of Pymepharco. The market is projected to grow from $7 billion in 2023 to $10 billion by 2026, driven by an aging population and rising healthcare spending. This trend underscores the strategic value of domestic pharma companies with production and distribution capabilities.

Key Facts

• Vietnam’s pharmaceutical market size grew from $3.4 billion in 2015 to nearly $7 billion in 2023, and is forecast to reach $10 billion by 2026.
• Taisho Pharmaceutical (Japan) acquired 51.01% of DHG by mid-2019, with total investment estimated at VND 7,000 billion (approximately $300 million).
• STADA Arzneimittel (Germany) completed the acquisition of nearly 99.5% of Pymepharco (PME) in 2021, subsequently delisting the company.
• The population aged over 60 in Vietnam is expected to rise from 13.9% in 2023 to over 25% by 2050, driving demand for chronic disease medications.
• DHG closed at VND 93,000 on July 14, 2026, on HOSE.
• Livzon Pharmaceutical Group (China) initiated a deal in early May 2026, indicating continued foreign interest.

What Happened

According to a report by SHS Research, the Vietnamese pharmaceutical sector is entering a new growth cycle from 2025-2030, transitioning from traditional generic drug production to a modern manufacturing ecosystem meeting international standards. This shift is attracting significant foreign M&A interest, as global pharmaceutical companies seek to gain control over local firms with strong production and distribution networks.

Notable transactions include Taisho Pharmaceutical’s acquisition of DHG, which began in 2016 with a $100 million purchase of 24.4% stake at a 20-30% premium. By 2019, Taisho held a controlling 51.01% stake. Similarly, STADA acquired nearly all of Pymepharco in 2021, delisting it from the stock exchange. The article, citing SHS Research, highlights that most leading Vietnamese pharma companies now have foreign strategic shareholders.

Market Context

DHG, listed on HOSE, closed at VND 93,000 on July 14, 2026. The stock has likely benefited from the positive sector sentiment driven by M&A activity and growth projections. The broader Vietnamese pharmaceutical sector is seeing increased foreign interest, with deals often at premiums to market prices. The aging population and rising healthcare expenditure provide a structural growth backdrop, making the sector attractive for long-term investors.

Strategic Significance

The foreign M&A wave reflects a strategic shift: international pharma companies are seeking to establish a foothold in Vietnam’s growing market, leveraging local manufacturing and distribution to access both domestic and regional supply chains. For DHG, Taisho’s control brings capital, technology, and access to global markets, potentially enhancing its competitive position. The trend also signals that domestic firms with strong fundamentals may become acquisition targets, offering exit opportunities for existing shareholders.

What to Watch

• Further M&A announcements involving other Vietnamese pharma companies, especially those with strong production capabilities.
• DHG’s quarterly earnings reports to assess the impact of Taisho’s integration and investment.
• Regulatory changes in Vietnam’s pharmaceutical sector, including pricing and foreign ownership rules.
• Demographic data releases confirming the aging population trend and its impact on drug demand.
• Competitor moves, such as Livzon’s planned investment and its implications for market dynamics.