Samsung Group is considering raising up to 3 trillion won (US$2.81 billion) to buy a considerable stake in its biopharmaceutical unit Samsung Bioepis Co. from its second largest shareholder, US biotech firm Biogen.
The move is part of the group’s strategy to gain further ground in the biopharmaceutical sector by strengthening its control of Samsung Bioepis before the expiration of Biogen’s right to exercise a call option in June.
According to industry sources on April 9, Samsung C&T Corp., the de facto holding firm of Samsung Group, has started talks with Biogen to purchase at least a 30 percent stake in Samsung Bioepis. To finance the deal, it plans to raise up to 3 trillion won (US$2.81 billion).
Currently, Samsung BioLogics and Biogen hold 94.6 percent and 5.4 percent stake in Samsung Bioepis, respectively. However, Biogen owns a call option that allows it to increase its stake in Samsung Bioepis up to 49.9 percent. The call option expires at the end of June this year.
Biogen was granted the right to exercise a call option when it jointly established Samsung Bioepis with Samsung BioLogics Co. in 2011. Biogen can exercise the call option anytime within the exercise period if it pays 50,000 won (US$47) per share.
Given that Samsung Bioepis has around 10 trillion won (US$9.36 billion) worth of market value, Biogen needs about 450 billion won (US$421.35 million) to acquire a 49.9 percent stake in it, according to market experts.
If the negotiation between Samsung C&T and Biogen goes as planned, Samsung BioLogics will hold a 50 percent stake in Samsung Bioepis, Samsung C&T 30 percent and Biogen 20 percent.
Samsung C&T will need 3 trillion won (US$2.81 billion) to secure a 30 percent stake in Samsung Bioepis. The company is expected to raise 1 trillion won (US$936.33 million) internally and the remainder from financial firms at home and abroad. Some even say that Samsung C&T may seek to purchase Biogen’s whole stake in Samsung Bioepis.
Samsung Group is planning to accelerate its foray into the global biopharmaceutical market by raising its stake in Samsung Bioepis. Recently, Samsung Bioepishas has become the world’s first firm to obtain approval for biosimilars of three of the four most popular autoimmune disease treatments.
As Samsung Bioepis continues to smoothly carry out clinical trials for new biosimilars, it has become a leading “K-Bio” company, along with Celltrion Inc., that leads the global biopharmaceutical market.
As Samsung Bioepis begins to put up a brilliant performance, Samsung Group seems to be seeking to gain a firm hold on it by taking over part of the stake from its joint venture partner. Industry watchers say that the group’s latest decision could be part of its preparation to merge Samsung Bioepis with biomedicine producer Samsung BioLogics.