Celltrion Group announced the formation of a special committee to evaluate the feasibility of a merger between its subsidiaries Celltrion and Celltrion Pharm on Wednesday.

The process comes after Celltrion Group Chairman Seo Jung-jin said in late August 2023 that the group would seek to merge with Celltrion Pharm within six months after the merger between Celltrion and Celltrion Healthcare is completed.

This first-phase committee, composed entirely of outside directors, will provide an independent and comprehensive assessment of the potential merger.

According to Celltrion, following the merger between Celltrion and Celltrion Healthcare, Celltrion has been considering a merger with Celltrion Pharm.

The company determined that an independent and objective evaluation through a special committee is essential for this process.

"As a result, the special committees for both Celltrion and Celltrion Pharm, consisting solely of external directors, will conduct thorough internal and external evaluations to assess the current viability of the merger," the company said. "These evaluations will incorporate various factors, including shareholder opinions collected through surveys, anticipated synergies from the merger, assessments by neutral external institutions, and financial evaluations."

Based on these comprehensive evaluations, the committees will present their final opinions on the merger's feasibility to each company's board of directors.

Should the committees find the merger feasible, a second-phase special committee will be established to advance the merger process.

As part of this initiative, the committees will first conduct shareholder surveys to gauge support or opposition to the merger, with the company stressing the results of these surveys will significantly influence the final recommendations. Opinions from Korean and international institutional investors will be collected through interviews conducted by independent external organizations.

Celltrion Group emphasized that the merger, like the previous merger with Celltrion Healthcare, requires overwhelming shareholder support to proceed.

Chairman Seo had previously pledged during the annual general shareholders in March of this year that he will maintain neutrality regarding the merger and will align his stance with the majority opinion of shareholders following the survey.

The survey, open to shareholders listed on the registry as of June 30, will be conducted from Wednesday until 5 p.m. on Aug. 12, with interested investors able to participate via the survey pages on the companies' websites.

Survey questions will include shareholders' support or opposition to the merger between Celltrion and Celltrion Pharm, reasons for supporting, opposing, or abstaining from the merger, expectations from the merger, and prerequisites for the merger.

The company plans to announce the survey results, the special committee's findings, and the board's decisions following the established procedures.

"This decision was made to establish a transparent and inclusive governance framework, practicing ESG (Environmental, Social, and Governance) management, and fostering a shareholder-friendly corporate culture," the company said.