Merger Between Celltrion Inc and Celltrion Pharm Is Cancelled

• Celltrion Inc announced that its proposed merger with Celltrion Pharm has been cancelled due to disapproval of this deal among an overwhelming percentage of Celltrion Inc shareholders.

• This cancellation of a merger between Celltrion Inc and Celltrion Pharm is likely to continue to have a positive impact on Celltrion Inc and negative impact on Celltrion Pharm.

• The major reason is because Celltrion Pharm trades at high valuation multiples while Celltrion Inc trades at lower valuation multiples. Celltrion Pharm's P/B valuation is more than 3x Celltrion Inc's.

Celltrion Inc (068270 KS) announced that its proposed merger withCelltrion Pharm (068760 KS) has been cancelled due to disapproval of this deal among an overwhelming percentage of Celltrion Inc shareholders. Following this announcement, Celltrion Inc (068270 KS)'s share price increased by 1.3% to 197,200 won and Celltrion Pharm (068760 KS)'s share price declined by 1.8% to 75,700 won on 16 August.

Boards of both companies have agreed to not to proceed with this merger. Celltrion Pharm mainly produces and sells synthetic drugs in Korea. In 2023, Celltrion Inc was able to complete its merger with Celltrion Healthcare which specializes in the distribution of biopharmaceutical products.

According to a recent shareholder survey, only 8.7% of the Celltrion Inc shareholders approved the merger and 36.2% were against it. The remaining 55.1% of shareholders abstained from voting. Combining the majority opinion with the shares of the controlling shareholders, the final opposition rate was 70.4% (by Celltrion Inc shareholders), suggesting high levels of disapproval of this merger deal, especially for the shareholders of Celltrion.

On the other hand, 67.7% of Celltrion Pharm shareholders were in favor of the merger, with 9.8% opposed, and 22.6% abstaining. Clearly, Celltrion Pharm shareholders wanted to get this merger done more than the Celltrion Inc shareholders.

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