South Korea’s SK Innovation, parent of the country’s largest oil refiner and battery maker SK On, said on Tuesday that shareholders had approved a merger with energy affiliate SK E&S as part of a major restructuring of the conglomerate.
The merger plan, announced last month, would create a 100 trillion won ($75.35 billion) asset company, in an effort to shore up the finances of loss-making battery unit SK On by combining it with a profitable company that has a stronger balance sheet, analysts said.
The merger was approved by more than 85% of shareholders attending the meeting, SK Innovation said in a statement, adding that 95% of foreign shareholders at the meeting approved the merger plan.
The merged company will be launched on Nov. 1.
Shares of SK Innovation rose as much as 5% after the plan was approved, outperforming the benchmark KOSPI, which ended the morning down 0.5%.
Unlisted SK E&S operates businesses including profitable city gas utilities and liquefied natural gas (LNG) power generation units. It reported a 1.3 trillion won ($939.37 million) operating profit in 2023 and 11.2 trillion won in sales.
Battery maker SK On has never made a profit since it was split off from SK Innovation in late 2021. Lately, it has been struggling with a drop in electric vehicle battery shipments amid a global slowdown in EV sales.
SK Innovation reported a consolidated 1.9 trillion won operating profit in 2023, generating 77.3 trillion won in sales.
($1 = 1,327.1700 won)
Reuters
