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Biogen to increase Samsung Biologics JV stake amid probe

South Korea's Samsung Biologics Co. Ltd. said Biogen Inc. is offering to increase its shareholding in the companies' joint venture, Samsung Bioepis Co. Ltd.

Biogen is exercising a call option under the joint venture agreement to acquire an additional 44.6% stake in Samsung Bioepis — a developer of biosimilars — for about 700 billion South Korean won. The Cambridge, Mass.-based drugmaker intends to use the call option June 29.

After the exercise of the call option, Biogen will increase its stake to 50% minus 1 share of Samsung Bioepis, up from 5.4%.

South Korean financial watchdog the Financial Supervisory Service has accused Samsung Biologics of breaching accounting rules.

Samsung says the accounting discrepancy is due to the change in accounting methods for its interest in Samsung Bioepis — valuing the joint venture at fair market value instead of book value. The switch from the consolidated to equity method of accounting helped Biologics to book a profit ahead of its 2016 IPO.

Samsung Biologics is owned by Samsung Electronics Co. Ltd. and Samsung C&T Corp.

As of May 17, US$1 was equivalent to 1,082.31 South Korean won.