- American Chamber of Commerce in Korea
- Your Partner in Business Since 1953
>
>
2024.07.19
SK Innovation, SK E&S boards approve merger
BY
JIN EUN-SOO, Korea JoongAng Daily - The boards of SK Innovation and SK E&S
approved a merger on Wednesday, kicking off what's expected to be the biggest
restructuring at SK Group in two decades.
The
merger will lead to the creation of an energy giant with an asset value of 106
trillion won ($77 billion) and combined revenue of 90 trillion won encompassing
industries from oil refining to renewable energy and EV batteries. The merged
company will launch on November 1.
The
merger ratio of SK Innonvation and SK E&S was settled at one to 1.2, and SK
E&S will operate as a "company in company" under which no
workforce adjustment is made and management independence is guaranteed.
"[The
purpose of the merger] is to elevate profitability and growth potentials while
enhancing the company's sustainability by securing growth engines for the
future energy business and establishing a stable profit structure," SK
Innovation said in an electronic disclosure Wednesday afternoon after the board
meeting.
The
two companies aim to reach 20 trillion won in earnings before interest, taxes,
depreciation and amortization by 2030.
SK
Group is in the process of a major restructuring amid mounting liabilities at
its key affiliates accumulated through years of aggressive merger and
acquisition deals as well as overseas factory construction.
The
latest merger deal aims to salvage cash-strapped SK On, an EV battery maker,
that's has logged 10 consecutive quarters of operating losses due to slowing
demand for electric cars.
SK
On is a wholly owned subsidiary of SK Innovation spun off in 2021. SK
Innovation's merger with SK E&S, a cash-cow business within SK Group
dedicated to liquefied natural gas and other forms of renewable energy that
reported 1.3 trillion won in operating profit last year, will improve the
struggling battery firm's finances.
The
two companies plan to hold a shareholder meeting next month to approve the
deal.
SK
Inc.'s ownership of the new SK Innovation will go from 36.2 percent to 55.9
percent after the merger.
SK
On and SK Trading International, which specializes in crude oil trading, as
well as SK Enterm, which specializes in energy logistics, also decided to merge
in their respective board meetings on Wednesday.
"The
merger of SK Innovation and SK E&S is a structural and fundamental
innovation that targets sustainable growth by actively responding to
environmental changes surrounding the energy industry," said SK Innovation
CEO Park Sang-kyu in a release Wednesday.
SK
Inc., the holding company of SK Group that owns 36.2 percent of SK Innovation
and 90 percent of SK E&S, will hold a board meeting on Thursday to discuss
the matter as well.
SK
Innovation shares soared by 5.65 percent on Wednesday on hopes of approval for
the merger, closing at 119,700 won.
American Chamber of Commerce in Korea
Address: 15Fl., Two IFC, 10, Gukjegeumyung-ro, Yeongdeungpo-gu, Seoul 07326, Korea
Name of Representative: James Kim
Business Registration No: 771-82-00210
E-Commerce No: 2019-서울영등포-0027
Monday through Friday, 9:00am to 6:00pm (Closed on Korean Public Holidays.)
ⓒ 2023. American Chamber of Commerce in Korea. All Rights Reserved. Powed by WhateverSearch
240719_SK Innovation.png