SK Group’s headquarters in Seoul (Yonhap)
SEOUL, July 12 (Korea Bizwire) – SK Innovation and SK E&S, two key subsidiaries of the SK Group, are set to hold board meetings next week to discuss a potential merger, industry sources said on July 11.
This move is part of SK Group’s ongoing business restructuring efforts and could result in the creation of a massive energy company with assets exceeding 100 trillion won.
The board meetings are likely to take place on July 17, according to sources familiar with the matter. SK Innovation, which serves as an intermediate holding company for SK Group’s energy sector, is more than 30% owned by SK Inc., the group’s holding company. SK Inc. also holds a 90% stake in SK E&S.
Depending on the outcome of these discussions, SK Inc. is expected to convene its own board meeting to deliberate on the merger proposal. This would be followed by an extraordinary shareholders’ meeting and other necessary procedures to approve the merger.
When reports of the potential merger first surfaced on June 20, SK Innovation stated that it was “considering various strategic options, including a merger, to enhance business competitiveness,” but emphasized that no concrete decisions had been made.
If the merger proceeds, it would create an energy powerhouse with annual sales approaching 90 trillion won and total assets of about 106 trillion won.
SK Innovation is currently Korea’s largest private energy company, focusing on petroleum-based energy businesses such as refining, petrochemicals, and lubricants through its subsidiary SK Energy.
SK E&S, a profitable affiliate, specializes in liquefied natural gas (LNG), hydrogen, and renewable energy, having reported an operating profit of 1.3 trillion won last year.
Industry insiders suggest that SK Group is exploring this merger as a way to improve the financial structure of SK On, a subsidiary of SK Innovation that has been struggling due to a temporary demand stagnation in the electric vehicle market.
The merger ratio between the two companies is drawing significant attention from industry observers. As SK E&S is a privately held company, the method used to determine the merger ratio could potentially lead to objections from shareholders and other stakeholders.
When asked for comment, an SK representative stated that they “cannot confirm” any details regarding the potential merger.
Ashley Song (ashley@koreabizwire.com)
