▲ SK Innovation's Seosan Plant 2 in South Chungcheong Province
SK Innovation announced in a regulatory filing today (the 25th) that it will absorb and merge its separator business subsidiary, SK IE Technology (SKIET).
SK Innovation and SKIET held respective board of directors meetings today and approved the agenda for the merger between the two companies.
SK Innovation will be the surviving entity, while SKIET will be dissolved.
The merger ratio between SK Innovation and SKIET is set at 1 to 0.1174540.
Accordingly, 0.11 shares of SK Innovation common stock will be allocated for each share of SKIET common stock.
The two companies plan to secure approval for the merger proposal at the SK Innovation board of directors meeting and the SKIET shareholders meeting on November 24, and finalize the relevant procedures with a merger effective date of January 1 next year.
Regarding the purpose of the merger, SK Innovation stated, "The merging companies intend to pursue this merger to secure financial stability, preemptively mitigate business and financial risks, and improve operational efficiency through a business structure reorganization." It added, "Through this, we will be able to enhance the competitiveness of the separator business."
Launched in April 2019 through the physical spin-off of SK Innovation's materials business, SKIET has been operating the LiBS (lithium-ion battery separator) business, which is a core material for electric vehicle lithium-ion batteries.
However, as a difficult business environment has persisted—marked by a recent slowdown in global EV market growth, delayed demand recovery in major markets such as North America, and intensifying price competition with Chinese firms—it faced limitations in improving profitability and cash-generation capabilities in the short term.
SK Innovation explained that with SKIET's capacity for independent fundraising being limited, it decided to pursue this merger as it judged that combining with the parent company would be advantageous in resolving business and financial risks while boosting business competitiveness.
Following the merger, the company plans to enhance operational efficiency related to the separator business, reduce various overlapping and financing costs, and combine SK Innovation's R&D capabilities with SKIET's product development capabilities to strengthen competitiveness, including expanding the separator business for energy storage systems (ESS).
(Photo provided by SK Innovation, Yonhap News)
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