Samsung Biologics is undergoing a spin-off, with analysis suggesting this may not solely be for business purposes but could be part of a restructuring of its governance. Securities firms assessed that a mid-tier holding company for Samsung Bio could be established, or that Samsung C&T may seek to expand its control over Samsung Electronics.
According to the financial investment industry on the 22nd, the spin-off of Samsung Biologics will divide the existing company into the remaining company, Samsung Biologics, which conducts contract development and manufacturing (CDMO) of biopharmaceuticals, and Samsung Bioepis Holdings (tentative), which will focus on biosimilars (replicated biopharmaceuticals). The spin-off ratio is 0.65 for Samsung Biologics and 0.35 for Samsung Bioepis Holdings.
Securities firms believe there is a possibility of establishing a Samsung Bio holding company. This would involve Samsung C&T and Samsung Electronics contributing their equity in the remaining company, Samsung Biologics, to the newly established company, Samsung Bioepis Holdings, in kind after the spin-off.
Choi Kwan-soo, a researcher at SK Securities, noted, "Based on current stock prices, after the in-kind contribution, the equity ratios for Samsung C&T and Samsung Electronics in Samsung Bioepis Holdings will increase to 53.2% and 38.6%, respectively, from the previous 43.1% and 31.2%, while Samsung Bioepis Holdings will hold a 74.3% equity stake in Samsung Biologics."
There are also scenarios being considered where Samsung C&T may sell its shares in the mid-tier holding company, Samsung Bioepis Holdings. Based on current stock prices, Samsung C&T could secure approximately 30 trillion won in cash, similar to the combined equity value of Samsung Electronics held by Samsung Life Insurance and Samsung Fire & Marine Insurance (approximately 33 trillion won). This implies that through the sale of its equity in Samsung Bioepis Holdings, Samsung's financial affiliates could increase their holdings in Samsung Electronics.
It is also possible to partially sell the equity in the remaining company, Samsung Biologics. Kim Soo-hyun, a researcher at DS Investment Securities, said, "Samsung C&T could sell part of its equity in Samsung Biologics to use for acquiring Samsung Electronics equity," and added, "Over the long term, there is a strategy to utilize undervalued holding company stock prices to acquire additional equity in Samsung Bioepis Holdings from Samsung Electronics."
However, Samsung Group stated that the spin-off of Samsung Biologics is not aimed at restructuring its governance. Yoo Seung-ho, Chief Financial Officer of Samsung Biologics, and Kim Hyung-jun, Chief Financial Officer of Samsung Bioepis, said during an online briefing that, "This spin-off is unrelated to the group's governance restructuring," adding that, "It was necessary for business purposes, and securing customer trust is a key background."