Celltrion Group announced on August 16 that it will not proceed with the planned merger between Celltrion and Celltrion Pharm. The decision follows an in-depth review by the Phase 1 Special Committee for Merger Review, which assessed the merger’s potential synergies, financial implications, and shareholder sentiments.
Despite Celltrion’s larger market capitalization of 43.2 trillion won (approximately $32 billion), over 13 times that of Celltrion Pharm, the merger faced substantial resistance from Celltrion shareholders. A survey by the Special Committee revealed that only 8.7% of Celltrion shareholders supported the merger, while 36.2% opposed it, and the remaining abstained. Factoring in major shareholder influence, the opposition swelled to 96%.
Celltrion Pharm shareholders, on the other hand, were more optimistic, with 67.7% favoring the merger, hoping for growth in biopharmaceutical research and synergies in drug development. However, concerns about the merger ratio and insufficient benefits led Celltrion shareholders to block the proposal.
Financial evaluations indicated that the merger would negatively impact Celltrion’s financial flexibility, with risks of capital outflow and slightly deteriorated financial indicators. Despite potential synergies in R&D and production efficiency, both boards concluded that the merger is not feasible at this time, prioritizing shareholder interests and financial stability over potential long-term gains.
