Celltrion affiliates gear up for merger

A corporate logo of Celltrion is seen in front of its headquarters in Incheon. Yonhap

By Lee Min-hyung

Celltrion Group is moving to become a single entity by merging its three listed affiliates ― Celltrion, Celltrion Healthcare and Celltrion Pharm ― after selecting Mirae Asset Securities as a lead manager.

The biopharmaceutical company said, Thursday, it is reviewing the merger and has designated a manager, but did not share further details.

“Other details ― such as its timeline ― have not been confirmed as of now,” the company said in a note to investors.

Starting this year, the group has pushed for aggressive stock buybacks, in a preemptive move for the launch of the merged company. Celltrion's stock buyback amounted to 200 billion won this year alone. Celltrion Healthcare also engaged in the same act worth 75 billion won during the same period.

The decision is widely seen as a preliminary action for the launch of the combined entity, as any listed firms are prohibited from buying back their own shares less than a month before the merger. If the group does not engage in the stock buyback from now on, Celltrion Group's board of directors can approve the resolution of a merger as early as mid-August.

A major hurdle the company should overcome is possible backlash from minority shareholders. The company should receive the approval of two-thirds of its shareholders. As of the end of last year, the portion of its minority shareholders from Celltrion, Celltrion Healthcare and Celltrion Pharm reached 66.43, 58.6 and 45.15 percent, respectively.