Celltrion Group Announces Shareholders’ Approval for Merger

Celltrion Group, led by Chairman Jung-Jin Seo, disclosed on the morning of October 23rd that the merger resolutions of both Celltrion and Celltrion Healthcare have been overwhelmingly approved at their respective temporary shareholders' meetings held at Incheon Songdo Convensia and Sheraton Grand Incheon Hotel.

In August of this year, both companies had resolved to merge, and in today's shareholder meetings, a substantial majority of shareholders expressed their support for the merger proposal. Celltrion received an impressive 97.04% approval, while Celltrion Healthcare secured a commendable 95.17% approval. The merger is slated for completion by year-end, with the merger date scheduled for December 28th, followed by a period for exercising stock purchase rights until January 13th of the following year.

The merger between Celltrion and Celltrion Healthcare follows the 'absorption merger' structure, where Celltrion issues its new shares to the shareholders of Celltrion Healthcare. Each Celltrion Healthcare common share will be exchanged for 0.4492620 shares of Celltrion common stock. The per-share merger price is set at $109.99 for Celltrion and $49.41 for Celltrion Healthcare.

Conversely, Celltrion Group held a board meeting on this day and decided to enhance shareholder value and return policies post-merger. They have granted approval for the repurchase of their own shares and additional purchases. The shares to be repurchased amount to 2,309,813 shares of Celltrion, with an approximate value of $265.8 million. These shares align with the size equivalent to the new shares allocated to Celltrion Healthcare's own shares held post-merger. The repurchase date is scheduled for January 4, 2024, following the completion of merger registration.

On the same day, it was decided that Celltrion would acquire a total of 2,426,161 shares, with an estimated amount of around $254.7 million. Additionally, Celltrion Healthcare is poised to acquire a total of 2,440,000 shares, amounting to approximately $114.5 million. Both companies intend to procure their own shares through on-market purchases commencing October 24th.

Celltrion Group believes that the approval of this merger proposal and the post-merger plans to enhance shareholder value have fortified their foundation to advance as a global pharmaceutical powerhouse. The group anticipates three significant effects from this merger.

A spokesperson from Celltrion Group expressed, "By integrating the entire business cycle, from development to sales, we foresee improved cost competitiveness, which will provide substantial funding for the development of new drugs and modalities. This merger represents a pivotal moment, enabling us to pursue an assertive pricing strategy through strengthened cost competitiveness, thereby expanding our presence in sales regions and market share."

The spokesperson continued, "Furthermore, as the two companies integrate, the transaction structure will become more straightforward, enhancing financial metrics and transparency, ultimately bolstering investor trust. With the merger proposal's approval and the recent green light for the new drug 'Zymfentra' (known as 'Remsima SC' in the United States), Celltrion Group is one step closer to realizing the vision of 'Integrated Celltrion,' aiming for $8.9 billion in revenue by 2030, and asserting itself as a global pharmaceutical leader."

The spokesperson concluded, "Moreover, with the smooth progression of the development and approval process for five new pipeline products set to debut from next year, Celltrion Group will focus on leveraging its strengths and making comprehensive efforts to expedite growth."