SK Group, South Korea’s second-largest conglomerate, has offloaded 1.91 trillion won ($1.43 billion) in assets over the past year in a sweeping restructuring push. After designating artificial intelligence and energy as its core businesses in early 2024, the group has actively divested non-core units, including its rental car, polyurethane, and home appliance businesses.
SK Group has trimmed its subsidiary count from 716 at the end of 2023 to 660 by the third quarter of 2024, according to company filings. The conglomerate plans to accelerate restructuring this year, further bolstering its cash reserves. Industry sources say SK Ecoplant, the group’s environmental unit, is considering selling two waste management subsidiaries for an estimated 2 trillion won ($1.5 billion).
An SK Group official acknowledged the challenges, saying, “Reshaping a 300 trillion-won company is no easy task, but more changes have taken place over the past year than many realize.”
What began as SK Group’s internal overhaul has now turned into a broader corporate trend, as major South Korean conglomerates scramble to adapt to shifting global and domestic market conditions. The beginning of the second Donald Trump administration in the U.S., rising geopolitical uncertainties, fierce competition with China, and the AI-driven transformation of industries are forcing companies to act quickly.
Six of South Korea’s top 10 conglomerates are now streamlining operations and increasing cash reserves. SK Group, Lotte Group, and POSCO Group have put multi-billion-won businesses up for sale, while LG Group, Hyundai Motor Group, and Shinsegae Group are also restructuring through asset sales and financial adjustments.
POSCO Group abruptly halted its nickel plant project for EV batteries on Feb. 11, abandoning a multi-billion-won investment despite breaking ground in May 2024. POSCO aims to generate 1.5 trillion won ($1.1 billion) in cash through restructuring this year, having already secured 660 billion won ($500 million) by selling 45 non-core assets.
Lotte Group is also revamping its portfolio, selling rental car subsidiary Lotte Rental for 1.6 trillion won ($1.2 billion) in 2024. The conglomerate is reviewing further divestments across its subsidiaries. Lotte Wellfood sold its bakery plant in Jeungpyeong to Shilla Bakery on Feb. 7 and is considering selling additional factories in Suwon and Busan. Other potential sales include Korea Seven’s ATM business, Lotte Chemical’s overseas units, and Lotte Department Store’s Centum City branch.
Shinsegae Group is following suit, delisting Shinsegae Engineering & Construction after acquiring all its shares to stem continued losses. Hyosung Group recently transferred Hyosung Chemical’s specialty gas division to its affiliate Hyosung TNC for 920 billion won ($690 million) after failing to secure an external buyer.
Many conglomerates are using the proceeds from asset sales to invest in future growth sectors, fueling expectations for increased mergers and acquisitions (M&A) this year.
LG Chem is planning to sell its aesthetics business for about 500 billion won ($375 million) to focus more on drug development within its biotech division. Hyundai Motor Group is shifting its focus to electric vehicles and robotics, preparing to sell Hyundai WIA’s machine tool division for 300 billion to 400 billion won ($225 million to $300 million). Hyundai WIA will instead concentrate on EV thermal management and defense businesses.
HS Hyosung, a spinoff from Hyosung Group, is also exploring the sale of part of its steel cord business.
A corporate industry source said companies that have already secured cash reserves are likely to ramp up efforts this year to invest in future growth through M&A. Samsung, for instance, became the largest shareholder of Rainbow Robotics at the end of 2024, officially accelerating its expansion into the robotics sector. GS Group is internally reviewing potential M&A targets, while HD Hyundai is reportedly exploring opportunities beyond its core shipbuilding business, including small modular reactors (SMRs) and biotech ventures.
