LG Household & Health Care Completes Acquisition of Physiogel Asia and North America Business Rights

[Asia Economy Reporter Yujin Cho] LG Household & Health Care (CEO Cha Seok-yong) announced that it finalized a contract on the 29th to acquire the Asia and North America business rights of Physiogel from global pharmaceutical company GlaxoSmithKline (GSK) for 125 million pounds (approximately 190 billion KRW).

Along with the CNP Cosmetics (CNP) brand, which LG Household & Health Care acquired in 2014 and developed into a 100 billion KRW brand, the company plans to strengthen its global presence in the rapidly growing derma category worldwide through this acquisition of Physiogel.

In South Korea, based on high brand awareness, LG Household & Health Care will expand its derma cosmetics and personal care product portfolio by launching various new products. Additionally, it will launch Physiogel in the three major global beauty markets? the United States, China, and Japan? to nurture it as a leading global derma brand. The company also plans to diversify its markets by securing additional business rights in Turkey and the Commonwealth of Independent States (Georgia, Armenia, Azerbaijan).

Physiogel is a brand launched in 2000 by the German dermatology specialist company Stiefel and was acquired by GSK in 2009. Currently, the business is conducted mainly in Southeast Asia such as Hong Kong, Thailand, and the Philippines, as well as in Europe and South America. The global sales amount to approximately 110 billion KRW (as of the end of 2018), with the Asian market accounting for 60% of total sales, Europe 30%, and South America 10%. Among individual countries, the Korean market accounts for the highest sales proportion at around 30%, followed by Hong Kong and Thailand.

LG Household & Health Care plans to newly develop its business in the United States, Japan, and China, where it has not yet entered, by utilizing local subsidiaries. In China, where regulations on imported cosmetics are strict due to reasons such as animal testing, the company plans to produce products using its own factory in Guangzhou and sell locally produced products through channels like Watsons.