SK Innovation, the main chemicals unit of South Korea’s SK Group, announced that it plans to merge with its electric vehicle (EV) battery separator production subsidiary, SK IE Technology (SKIET), just five years after the struggling company went public.
SKIET was established in 2019 through the physical spin-off of SK Innovation’s materials business, and was later listed on the South Korean stock market (KOSPI) in May 2021.
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SK Innovation, which also owned battery manufacturer SK On Company, confirmed that the move to merge with SKIET, scheduled to be completed by the end of the year, will help bring greater financial stability and improve operational efficiency at its smaller subsidiary. The aim is to strengthen “the mid- to long-term competitiveness of SKIET’s separator business and enhance its shareholder value” from within SK Innovation.
SK Innovation said in a statement: “Under the transaction, SK Innovation will absorb SKIET. For SK Innovation, the surviving entity, the transaction will proceed as a small-scale merger, while for SKIET, the dissolving company, it will follow the general merger procedure. SK Innovation will issue new shares and allot them to SKIET shareholders.”
The merger is scheduled to be approved at SK Innovation’s board of directors meeting and at SKIET’s general shareholders’ meeting on 24 November, with related procedures to be completed on the merger date of 1 January 2027. The new SK Innovation shares issued in connection with the merger will be listed on 18 January 2027.
SK Innovation said in a statement: “The battery separator business environment has evolved significantly since the time of the spin-off, marked by a slowdown in the growth of the global EV market, slowing EV in demand in key markets such as North America, and intensifying price competition as Chinese competitors entered the global market.”
In light of these conditions, SK Innovation determined that reducing business and financial risks and enhancing business competitiveness through a merger with the parent company would be more advantageous than maintaining SKIET as a standalone entity, and decided to pursue the merger accordingly.
The merger is expected to improve the efficiency of the separator business by reducing operational overlap, including combining the two companies’ R&D operations, while also expanding into the energy storage systems (ESS) sector.
