SK Innovation, SK E&S set to hold board meetings on merger plan

SK Innovation Co. and SK E&S Co., two major energy affiliates of SK Group, are set to hold separate board meetings Wednesday to discuss a proposed merger of the two companies, industry sources said.

If the merger is approved, it will create the biggest energy company in South Korea, with combined assets of 106 trillion won ($76.5 billion).

The merger of SK Innovation, SK Group's energy subholding company, and SK E&S, a privately owned recycled energy firm, is part of the group's restructuring efforts aimed at strengthening its energy business and providing financial support to SK Innovation's battery subsidiary, SK On Co.

If their boards approve the merger plan, the companies will hold an emergency shareholders' meeting next month for follow-up measures.

The companies reportedly aim to finalize the merger process and launch the combined entity as early as November, sources said.

Subsequently, SK Corp., their largest shareholder and SK Group's holding company, will hold a board meeting the next day to discuss the issue.

As of the end of March, SK Corp. owned a 36 percent stake in SK Innovation and a 90 percent stake in SK E&S.

SK E&S operates in energy sectors, including liquefied natural gas (LNG), hydrogen and renewable energy, with sales of 11.2 trillion won and an operating income of 1.3 trillion won last year.

Meanwhile, SK Innovation is considering integrating SK On with other energy-related affiliates, including SK Trading International Co., as a way to strengthen the battery maker's competitiveness. (Yonhap)