Samsung Biologics Nears $2 Billion PolyPeptide Takeover

The logos of Samsung Biologics and PolyPeptide Group Samsung Biologics has cleared a major hurdle in its proposed acquisition of global peptide contract development and manufacturing organization (CDMO) PolyPeptide Group, with preliminary tender offer results showing shareholder acceptance well above the minimum threshold required for the transaction to proceed. Samsung Biologics said on Oct. 13 that 29,014,418 shares had been tendered during the offer period from Sept. 15 to Oct. 12, representing 87.88% of the shares targeted for acquisition. The result exceeded the minimum acceptance threshold of 66.7% by more than 20 percentage points. The tendered shares included all 18,375,000 shares held by PolyPeptide's largest shareholder, Draupnir Holding. The total shares tendered represent approximately 87.59% of PolyPeptide's outstanding shares. The acquisition, valued at 1.46 billion Swiss francs, or approximately 2.7 trillion won ($2.01 billion), is expected to become the largest M&A transaction in South Korea's pharmaceutical and biotechnology industry, surpassing SD Biosensor's approximately 2.3 trillion won acquisition of U.S.-based Meridian Bioscience in 2022. The deal is part of Samsung Biologics' strategy to capitalize on rapid growth in the peptide therapeutics market. Peptides are short chains of amino acids that can offer high biocompatibility and target specificity. They are used in treatments for obesity and diabetes, including Wegovy and Mounjaro, which have experienced surging global demand. The global obesity treatment market is projected to reach 200 trillion won by 2035. Through the acquisition, Samsung Biologics aims to expand its CDMO portfolio beyond antibody therapeutics, messenger RNA (mRNA) and antibody-drug conjugates (ADCs) into peptide-based medicines. The transaction will now move to the next stage. Samsung Biologics plans to conduct an additional tender period from Oct. 19 to Oct. 30, followed by regulatory approval procedures in Europe, India, Australia, Brazil and other relevant jurisdictions. Once the necessary approvals are obtained, the company expects to settle the transaction within 10 business days, with completion targeted for late November. Samsung Biologics plans to combine its expertise in designing and operating large-scale manufacturing facilities with PolyPeptide's technological capabilities to maximize synergies. It is also considering additional production capacity to meet growing market demand. A company official said the expansion into the fast-growing peptide sector would help Samsung Biologics secure new sources of medium- to long-term growth. Meanwhile, analysts expect Samsung Biologics to report third-quarter revenue of approximately 1.37 trillion won and operating profit of 617.8 billion won, broadly in line with market expectations. The company's growth momentum is being supported by full-capacity operations at Plants 1 through 4 and the beginning of revenue contributions from Plant 5 and its U.S. manufacturing facility. However, a second labor union strike scheduled to begin Oct. 26 and last three weeks remains a near-term risk. A previous strike in May reportedly disrupted approximately 150 billion won in revenue. Given the importance of supply chain reliability in the CDMO industry, analysts say the outcome of labor-management negotiations could affect future customer orders and financial performance.