"Minority Shareholders Oppose" Celltrion-Pharmaceutical Merger, Will It Be Decided on the 16th?

Celltrion Group announced on the 13th that it will hold a board meeting on the 16th to discuss the 'second phase merger' with Celltrion Pharm following the merger of Celltrion and Celltrion Healthcare.

Seo Jung-jin, Chairman of Celltrion. Photo by Hyunmin Kim kimhyun81@

On the same day, Celltrion explained through a notice on its website, "The shareholder opinion collection regarding the merger with Celltrion Pharm, which was conducted for all shareholders, ended on the 12th," adding, "We are currently compiling the comprehensive results." It further stated that a special committee composed solely of outside directors, established to review the merger, will conduct a multifaceted review of the survey results and the overall impact of the merger, and plans to report these findings at the board meeting on the 16th.

Previously, Seo Jung-jin, Chairman of Celltrion Group, had revealed plans to complete the three-company merger of Celltrion, Celltrion Healthcare, and Celltrion Pharm within this year following the merger of Celltrion and Celltrion Healthcare. Regarding this, the group stated, "The merger between Celltrion and Celltrion Healthcare was possible due to overwhelming support from shareholders," and added, "The second merger will also proceed only if there is a positive outcome that enhances shareholder value, based on the consent of the majority of shareholders." They have been conducting surveys and interviews to gather actual shareholder opinions.

Cheongju, Chungbuk Celltrion Pharm factory view
[Photo by Celltrion Pharm]

However, the atmosphere surrounding this second merger differs from that of the first. The main reason for opposition is the 'difference in scale.' As Celltrion Pharm’s stock price is considered overvalued compared to Celltrion, Celltrion shareholders are concerned that they may suffer losses relative to Celltrion Pharm shareholders when the merger ratio is determined in the future.

In response, the Celltrion Shareholders Alliance has been campaigning against the merger since the start of the survey. They oppose the merger citing reasons such as ▲stock price decline upon merger ▲significant damage to shareholder value ▲lack of justification for the merger, stating, "The first merger had justification such as resolving accounting fraud controversies and securing cost competitiveness through integration of manufacturing and sales, but the merger with the overvalued Celltrion Pharm has no practical benefits." Industry insiders estimate that 80-90% of Celltrion shareholders opposed the merger in this survey.