SK Innovation Company, the energy unit of South Korean conglomerate SK Group, has announced that it has approved the merger of its EV battery manufacturing subsidiary SK On Company with its EV lubricants subsidiary SK Enmove Company. The boards of the three companies recently signed an agreement for SK On to “absorb” the operations of SK Enmove, with the new combined company to be officially launched on 1st November – along with a major “capital expansion initiative.”
SK On is one of South Korea’s top three EV battery manufacturers, but has been struggling with slower-than-expected growth in global battery electric vehicle (BEV) sales. SK Enmove produces lubricants, immersion cooling solutions and air conditioning refrigerants for EVs and other applications.
The merger is expected to enhance the competitiveness and accelerate growth in SK Innovation’s electrification business, which is seen as a key driver of future growth. It is expected to generate additional revenues through the development of synergies between the two companies’ customers and businesses, and facilitate entry into new markets.
SK Innovation confirmed the boards of SK Innovation and SK On have “approved a resolution for a large-scale capital increase through third-party allotment, marking a proactive step in capital financing.” The company said it aims to raise a total of KRW 8 trillion (US$ 5.7 billion) in new capital this year.
SK Innovation said the merger and financial restructuring are part of its strategy “to become a leading total energy company with top-tier competitiveness in the future era of electrification,” as it targets KRW 20 trillion in EBITDA by 2030.
Lee Seok-hee, CEO of SK On, said in a statement: “With the expected synergies from the merger, including the integration of both companies’ technological and business capabilities, we anticipate showcasing a higher level of competitiveness in the global market.”
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