Huons (243070.KQ) is moving to strengthen its biopharmaceutical research and development capabilities by absorbing its affiliate Huons Lab. Market observers say the merger goes beyond a simple business reorganization and could accelerate succession planning for the owner family of Huons Global (084110.KQ).
Huons disclosed Tuesday that its board of directors approved a contract to absorb Huons Lab, a subsidiary of Huons Global. Huons will be the surviving entity, while Huons Lab will be dissolved. The merger ratio is 1 to 0.4256893. Huons plans to complete the merger on August 18 following an extraordinary shareholders' meeting in July.
The market views the core of the merger as the transfer of Huons Lab's value. Huons Lab is a biotech firm that holds 'HyDIFFUZE,' a formulation conversion platform based on human-derived hyaluronidase. The technology converts intravenous (IV) formulations into subcutaneous (SC) formulations, with Alteogen recognized as the leading player in the global market.
While the group officially cites strengthening the operating company's competitiveness and expanding biopharmaceutical R&D capabilities, industry analysts say the real aim is to move Huons Lab — which carries high growth potential — outside the holding company structure to ease governance burdens.
Huons Lab is currently a consolidated subsidiary of Huons Global. If Huons Lab's enterprise value rises significantly going forward, the value of holding company Huons Global would inevitably rise as well. Analysts say this could become a burden for the owner family during the succession process. As of the end of last year, Huons Group Chairman Yoon Sung-tae held a 42.76% stake in Huons Global, while his eldest son Vice President Yoon In-sang held 4.15%, second son Director Yoon Yeon-sang 2.73%, and third son Yoon Hee-sang 2.54%.
By contrast, if Huons Lab is integrated into the operating company Huons, Huons Global's control over Huons will strengthen. Assuming Huons Lab's enterprise value at around 120 billion won, the market estimates Huons Global's stake in Huons could rise from the current 40.8% to approximately 48%. The structure reduces the valuation burden on the holding company while reinforcing control over the core operating company.
Huons explained that the purpose of the merger is "to secure future growth drivers by expanding the biopharmaceutical pipeline and strengthening R&D competitiveness." The company also expects to benefit from the government's drug pricing preferences by obtaining innovative pharmaceutical company certification. "Through this merger, Huons will be equipped with integrated capabilities spanning pharmaceutical and biopharmaceutical R&D through to sales," Huons CEO Song Soo-young said. "It will serve as a cornerstone for our leap into a global pharmaceutical and biotech company."
