Yoon Sung-tae Family Holding Huons Lab Shares to Benefit Twofold After Merger [Listed Company at a Crossroads]

Owner Family Expected to Benefit, Stirring Renewed Debate Over Succession and Governance Reform
Concerns Over Dilution of Huons Global’s Control... Company Says "Long-Term Gains Will Grow"

Huons Global has decided to merge its unlisted bio subsidiary, Huons Lab, into another subsidiary, Huons. The family of Chairman Yoon Sung-tae currently holds personal shares in Huons Lab. As a result, following the merger, the Yoon family is expected to benefit from both the listing premium and increased dividend income from Huons Lab.

According to the Financial Supervisory Service’s electronic disclosure system on June 3, Huons Global announced on May 18 that its subsidiary, Huons Lab, would be merged with Huons, a KOSDAQ-listed company. The merger ratio between Huons and Huons Lab is set at 1 to 0.426. This means that if a shareholder owns 10 shares of Huons Lab, they will receive 4 shares of Huons.

Huons is a KOSDAQ-listed company that manufactures and sells healthcare products such as synthetic pharmaceuticals, local anesthetics, and health functional foods. Huons Lab is an unlisted bio research and development (R&D) company that owns the 'HyDIFFUZE' platform technology, which converts intravenous (IV) drugs into subcutaneous (SC) injectables. After the merger, Huons Lab will effectively acquire the status of a listed company.

Currently, the largest shareholder of Huons Lab is Huons Global, which is the holding company for the entire Huons Group. Huons Global owns 58.19% of Huons Lab’s shares (including voting convertible redeemable preferred shares).

The majority of the remaining shares are held by Chairman Yoon Sung-tae and his family. As of the end of 2020, Yoon In-sang, Vice President of Huons Global and a child of Chairman Yoon, as well as Yoon Yeon-sang and Yoon Hee-sang, each held 6.17%. Chairman Yoon and his wife, President Kim Kyung-Ah, each owned 4.94%. Although Huons Lab conducted a capital increase after that, resulting in some changes to the shareholding ratio, it has been confirmed that they still hold shares as of now.

The merger is expected to bring significant benefits to the Yoon family. First, the value of their holdings in Huons Lab is expected to increase. At the time of the merger, Huons Lab’s corporate value was estimated at 129 billion won, with a per-share value of 14,500 won. Considering that Huons Lab conducted a capital increase at 5,384 won per share in 2024, the Yoon family stands to gain at least a threefold profit as well as a listing premium.

Additionally, by increasing their direct stake in Huons, the family is expected to receive a larger amount of dividends. Currently, Vice President Yoon In-sang holds a 3.38% stake in Huons, while Yoon Yeon-sang and Yoon Hee-sang hold 0.33% and 0.32%, respectively. Chairman Yoon and President Kim hold no shares in Huons.

However, after the merger, the Yoon family’s shareholding in Huons is expected to more than double to around 8%. As the group’s cash cow, Huons distributes 25% of its net income as dividends each year. Its dividend yield is also about twice as high as that of Huons Global.

On the other hand, for Huons Global, the merger will reduce its control over Huons Lab. After the merger, Huons Global’s stake in Huons will increase from 40.74% to 42.79%. However, considering its previous 58.19% stake in Huons Lab, its effective controlling power will decrease.

Regarding this, a Huons Group representative stated, "Huons Global, as a pure holding company, has limited human resources and cash on hand, while Huons possesses stable cash generation capability, making it more suitable as the merging entity," adding, "This merger is unrelated to succession planning or changes in the governance structure."

He further stated, "From Huons Global’s perspective, the increase in its stake in Huons will lead to expanded dividends and higher investment efficiency over the long term, resulting in direct benefits for the company."

This content was produced with the assistance of AI translation services.