South Korean drug giant Celltrion Group has received a positive recommendation from Institutional Shareholder Services (ISS), a global leading proxy advisory firm, on the merger of its two affiliates up for vote at the shareholders‘ meeting later this month.

In its recent report, ISS recommended that shareholders of pharmaceuticals developer Celltrion Inc. and its global sales affiliate Celltrion Healthcare Co. vote in favor of the merger, scheduled to be completed by the end of this year, said sources familiar with the matter on Friday.

The proxy adviser stated that the biopharmaceuticals group has addressed issues on accounting and audit rules violations. ISS also noted the merger would allow the two affiliates to use a more flexible strategy for pricing within the integrated value chain, and help the group achieve its financial goals, sources said.

ISS’ recommendation would be a big boost for the merger as not only overseas investors but also local institutional and individual shareholders heed the proxy adviser’s advice, market watchers say.Some 80% of foreigners investing in Korean companies take ISS’ opinions into consideration before they vote on an agenda, according to sources. As of September, foreign investors make up around 21% and 17% of total shareholders in Celltrion and Celltrion Healthcare, respectively.

The proxy advisor’s recommendation indicates that the merger would bring meaningful benefits to the two firms and their shareholders, a financial industry source said.


In August, Celltrion Group said that it has received approval on the merger plan from the board of directors and kicked off relevant procedures. It aims to complete Phase 1, which will merge Celltrion and Celltrion Healthcare by the end of this year, and finish Phase 2, merging the integrated entity with Celltrion Pharm Inc., which focuses on domestic sales and marketing, around July 2024.The group will hold a meeting for shareholders of Celltrion and Celltrion Healthcare on Oct. 23 to vote on Phase 1.

It aims to achieve 12 trillion won ($8.9 billion) in revenue in 2030 by boosting sales in biosimilars and new drugs and saving costs through mergers, founder and Chairman Seo Jung-jin said in August. Last year, the group logged 2.28 trillion won in revenue and 647.1 billion won in operating profit.