Celltrion, Celltrion Pharm cancel merger due to shareholder pushback

Celltrion and Celltrion Pharm announced Friday that they will not proceed with their previously planned merger, citing objections from Celltrion’s shareholders.

Celltrion's exhibition booth at the CPHI 2023 held in Fira Barcelona Gran Via [SHIN HA-NEE]

Celltrion and Celltrion Pharm announced Friday that they will not proceed with their previously planned merger, citing objections from Celltrion’s shareholders.

Celltrion, which completed its merger with Celltrion Healthcare in December last year, had been set to merge with Celltrion Pharm, the drugmaker’s domestic distributor and chemical drug development subsidiary.

The decision was made by the boards of directors of each company after their respective special committees reviewed the merger plans.

The committees conducted a survey of both companies’ shareholders regarding the merger from July 31 to Aug. 14. The majority shareholders, including Celltrion Holdings and Chairman Seo Jung-jin, did not cast direct votes to avoid skewing the results, instead automatically aligning with the plurality.

The survey showed that 36.2 percent of Celltrion shareholders opposed the merger, while 8.7 percent voted in favor and 55.1 percent abstained. When adjusting the poll results by adding the majority shareholders' stake to the side with the plurality, the opposition votes increased to 70.4 percent.

On the other hand, a majority of shareholders in Celltrion Pharm, or 67.7 percent, voted in favor of the merger, with 9.8 percent against and 22.6 percent abstaining.

As such, the board of Celltrion decided against the proposed merger, according to the company.

“Each company’s board made the decision not to pursue the merger, so the companies will now focus on their respective businesses to maximize growth potential and synergy within the group,” said a spokesperson for Celltrion Group.

“A merger that would benefit both companies’ shareholders can be considered in the future, so we will continue to listen to their input and prioritize shareholder value while focusing on growth.”

Celltrion closed 1.34 percent higher than the previous session at 197,200 won ($145.09) on Friday on the Kospi, while Kosdaq-listed Celltrion Pharm shed 1.82 percent to close at 75,700 won.

Update, Aug.16: Closing prices of Celltrion and Celltrion Pharm added.

BY SHIN HA-NEE [shin.hanee@joongang.co.kr]