TOKYO (Feb 28): Japanese retailer Aeon and drugstore chains Tsuruha and Welcia said on Wednesday they will merge their businesses by 2027 to form Japan's largest pharmacy.

Aeon also said it plans to spend about 102.3 billion yen (US$679 million) to acquire a 13.6% additional stake in Tsuruha from Hong Kong-based hedge fund Oasis Management. Oasis and Aeon each have about a 13% holding in Tsuruha.

Increasing Aeon's stake would add to its drugstore business, a key growth driver for the firm, which holds 51% of Welcia and 10% of Kusuri No Aoki Holdings in the same sector.

The three companies said they will seek to expand their businesses outside Japan, including the Southeast Asian market.

They will hold a joint news conference about their health and wellness business strategy at 0900 GMT Wednesday.