Taisho Pharmaceutical Co. and Tanabe Seiyaku Co. announced Monday that they will integrate operations under a holding company.
The decision is seen as a bid to survive cut-throat competition in the global market.
With combined sales worth 470 billion yen, the deal will create the nation's third-largest pharmaceutical company, following Takeda Chemical Industries Ltd., at 960 billion yen, and Sankyo Co., at 550 billion yen.