Kimia Farma, which showed interest in Dawaa already in 2016, now has a 60 percent stake in it, while the remaining shares are controlled by its holding company Marei bin Mahfouz, a Mecca-based firm engaged in health care products and services.
The companies signed a conditional shares subscription agreement on July 25 in Mecca.
Dawaa runs wholesale and retail businesses, selling pharmaceutical, cosmetic and medical products, as well as health care equipment. It operates 31 stores — 10 in Mecca and 21 in Jeddah — and has two distribution centers.
"This is the time for Kimia Farma to enlarge its business on a global scale. As a state-controlled pharmaceutical company, Kimia Farma is not only available at the domestic market, but now also internationally," Kimia Farma president director Honesti Basyir said in a statement on Monday.
He added that the business expansion to Saudi Arabia is also aimed at supporting the increasing number Indonesian citizens working in the Middle East or coming to Saudi Arabia for hajj and umrah.
Aside from operating drugstores, Kimia Farma will also sell its products in Saudi Arabia, and plans to build clinics and hospitals in the future.
Honesti said that Saudi Arabia is a promising market, as its pharmaceutical sector is expected to be worth $20 billion in 2020.
Kimia Farma's products are sold in several countries, including the Netherlands, Singapore, India, China, Malaysia, the United States, Ireland and Afghanistan.
In Indonesia, it operates 1,005 drugstores, 500 clinics, 47 laboratories, 10 optical shops and 47 trading and distribution centers.
The company plans to expand its herbal business in the coming years, as it sees an increasing demand for such products in Southeast Asia and Africa.