subject: Lg Household Take Over Pasteur Milk [print this page] LG Household & Healthcare has agreed to buy Pasteur Milk in an effort to strengthen its drinks business, a source said on Monday.
The acquisition of Pasteur, a premium dairy producer, from Korea Yakult is the latest move by the LG group subsidiary to advance into a food and healthcare giant.
The firm has been aggressively expanding via a series of mergers and acquisitions such as that of Coca Cola Korea Bottling (2007), and Diamond Water, Hankook Beverage and TheFaceShop (2010).
With this recent acquisition, LG completes a full lineup in the beverage and dairy business, the source said. With its distribution network, LG will be able to make a strong food and beverage business.
The deals price was not disclosed.
Spokesmen for LG, Yakult and Pasteur all refused to confirm the report. On July 20, LG said in a public disclosure that Pasteur was one of several options it was considering.
Founded in 1947, LG Household & Healthcare is best known for its Perio toothpaste and PongPong kitchen detergent brands. Revenue is growing fast in all of its three business sectors beauty, healthcare and beverages. Over the past five years, its revenue has grown three times, and profits have jumped almost six-fold.
The rapid growth has continued this year. It reported a 29 percent increase in second-quarter revenue from the same period last year, as well as a 55 percent increase in net profit. The firms stock price also climbed up from around 100,000 won in 2008 to 383,500 won on Monday.
Pasteur Milk was founded in 1987. By introducing low-temperature pasteurized milk to Korea for the first time, the firm has built a premium brand image.
Yakult bought all the shares of Pasteur in 2005 for 27.5 billion won. But the brand suffered more than 12 billion won in net losses between 2008 and 2009 as competition intensified in the premium dairy market.
LG already sells yogurt products in a partnership with Danone, a multinational giant.
