[Edaily Reporter KIM SAE-MI ] The merger between Cha Healthcare and Cha Care, which the Cha Bio Group has been pursuing since late 2024, is closely tied to the ownership structure of the founding family. This is because Cha Kwang-ryeol, Director of the Global Comprehensive Research Institute at Cha Hospital and Cha Bio Group, and Cha Won-tae, CEO of Chabiotech Co.,Ltd., among others, hold shares in Cha Care under their personal names; if an IPO takes place after the merger, their shares could be converted into shares of the listed company.

Although the contractual obligation to merge, which was linked to a recent investment by STIC Investments, Inc., has been lifted, Chabiotech Co.,Ltd. has not disclosed whether it intends to proceed with the merger. Meanwhile, Cha Care has sold its stake in Kakao Healthcare to Jayjun Cosmetic(025620)(formerly Jjun Cosmetics) for 15 billion won. It remains to be seen how the changed asset structure will be reflected in Cha Care’s valuation should the merger proceed in the future.

Merger Pursued for Over a Year: Will It Proceed Even After Contractual Obligation Expires?…No Response

According to a compilation of E-Daily’s reporting on the 30th, when asked whether the merger plan between Cha Bio Group, Cha Healthcare, and Cha Care is still valid, as well as the expected timeline, reasons for delays, and methods for calculating enterprise value and the merger ratio, Cha Bio Group replied, “We have not been able to confirm specific answers to each of these questions.”

Instead, the company explained the background behind its past consideration of the merger. A representative from Cha Bio Group stated, “In late 2024, we secured an investment of 120 billion won from STIC Investments, Inc., a domestic private equity fund (PEF) manager, and agreed to list Cha Healthcare by 2027. To fulfill the post-closing conditions of the investment, we have been reviewing the merger between Cha Healthcare and Cha Cares.”

At the time, the contract with Stick included a post-closing condition stipulating that the two companies would merge if certain conditions were met. In fact, Cha Healthcare selected an external advisory firm to review tax and legal procedures, corporate valuation, and the impact of the merger on the IPO.

However, when Chabiotech Co.,Ltd. made an early redemption last June of the 120 billion won in exchangeable bonds (EBs) held by STICK, the rights and obligations under the contract were terminated. The company also stated, “Since the EBs in question have now been redeemed, the IPO obligation under the original contract has also been extinguished.”

Cha Bio Group stated, “There is no change to Cha Healthcare’s domestic IPO plans,” adding that it would explore options in accordance with the financial authorities’ detailed regulations and guidelines regarding dual listings. This means that while the direct contractual obligation to consider a merger has disappeared, Cha Healthcare’s IPO plans remain unchanged. The key issue is whether the company will maintain the plan to merge with Cha Care during the IPO process.

Cha AI

Sells

Kakao Health Stake for 15 Billion Won… Changes to Cha Care’s Asset Structure

Amid uncertainty regarding the future of the merger plan,

Cha Care

sold 3,182,686 shares of Kakao Healthcare it held to CHA AI Healthkare for 15 billion won last June. The transaction price was 4,713 won per share, the same price at which the Cha Group acquired existing Kakao Healthcare shares from Kakao in 2025. An external appraisal agency also issued an opinion deeming the transaction price appropriate.

Following the transaction, CHA AI Healthkare’s stake in Kakao Healthcare increased to 26.91%, while ChaCare’s direct stake fell to the 16% range. Although the group’s total stake remained unchanged, a portion of ChaCare’s investment assets was converted into cash.

At the same time, Cha Care acquired 5 billion won worth of convertible bonds (CBs) issued by CHA AI Healthkare. Taking this into account, Cha Care saw a net cash inflow of approximately 10 billion won. Around the same time, CHA AI Healthkare also acquired Chabiotech Co.,Ltd.’s stake in the Invictus Japan Healthcare Fund for 20.2 billion won.

This asset restructuring is drawing attention because, should a merger be pursued in the future, the valuation results of both companies will influence the merger ratio. While the sale of the Kakao Healthcare stake does not in itself increase ChaCare’s enterprise value, it has altered its asset composition.

Chabiotech Co.,Ltd. has not provided specific answers regarding whether the recent asset restructuring among affiliates and the merger of the two companies are separate decisions, or whether these transactions are likely to affect future valuations or the merger ratio.

From Merger to IPO… Cha Kwang-ryeol and Cha Won-tae’s Personal Shares to Become Listed Stock

The reason the possibility of a merger between the two companies is a sensitive issue is due to their differing shareholder structures. As of the end of 2025, Chabiotech Co.,Ltd. is the largest shareholder of ChaCare, holding a 46.49% stake. Individual shareholders, including Director Cha Kwang-ryeol, hold 25.40%, while KH Green (3.77%), the Sungkwang Medical Foundation (3.26%), and the Sungkwang Academy (1.10%) are also major shareholders.

In particular, as of the end of 2024—when individual shareholdings were disclosed—Director Cha Kwang-ryeol held 8.22% and CEO Cha Won-tae held 7.19%. This means that, aside from indirect control through Chabiotech Co.,Ltd., the owner family directly holds shares in ChaCare under their personal names.

ChaCare provides facility management, IT, and operational services to Cha Hospital and its affiliates. The company is highly dependent on internal transactions, with approximately 77% of its 2025 standalone revenue of 53.1 billion won generated from transactions with group affiliates and related entities. If a merger proceeds, how to assess the sustainability of revenue based on these internal transactions and the company’s independent business value could become a variable in determining the merger ratio.

While CHA AI Healthkare has attracted financial investors (FIs)—such as the Pium AI Future Healthcare Fund, which recently invested 200 billion won—ChaCare is owned by the owner family, including Cha Kwang-ryeol and Cha Won-tae. Depending on how the enterprise values of the two companies are assessed, the ownership stakes among Chabiotech Co.,Ltd., new FIs, and the owner family will vary following the merger.

In particular, if the companies merge primarily around Cha Healthcare and then proceed with an IPO, the unlisted shares in Cha Cares held by the owner family could be converted into shares in the future listed company. Consequently, the merger ratio could also affect the future share value and control of the owner family, including CEO Cha Won-tae.

Chabiotech Co.,Ltd. also did not respond to questions regarding whether it had reviewed the expected ownership stakes or economic benefits for individual shareholders of Cha Care—such as Director Cha Kwang-ryeol and CEO Cha Won-tae—in the event of a merger.

The market is watching closely to see whether the Cha Biotech Group will proceed with the merger of the two companies, even now that the contractual obligation to merge has been lifted. How the Cha Healthcare IPO and the ownership structure of the controlling family will interplay is expected to depend on whether the merger proceeds and, if so, how it is structured.

An industry insider in the investment banking sector predicted, “As things stand, there is already significant uncertainty regarding whether Cha Healthcare will be able to proceed with its IPO as planned,” adding, “If it also pursues a merger with ChaCare, the listing will become even more difficult, as the company will need to explain the necessity of the merger, the valuation, and the conflicting interests between existing shareholders and the owner family.”