SK Innovation and SK E&S plan to merge, creating a major energy company and sparking significant industry anticipation, and this caused a surge in the stock price of SK Innovation. As of 9:13 AM on Jun. 20, SK Innovation is trading at 119,100 won ($86.13), up 13.75% from the previous day.
Industry insiders expect that the SK Group will hold a strategic management meeting at the end of this month to finalize the merger plans between SK Innovation and SK E&S. The combined assets of the two companies are expected to exceed $72.3 billion.
This merger could create significant synergy between the two companies. SK Innovation specializes in petroleum, while SK E&S focuses on liquefied natural gas (LNG), solar power, wind power, and hydrogen. If the merger goes through, it will result in the formation of an energy company that integrates both fossil fuels and renewable energy sources.
Some speculate that the merger’s motivation lies not only in scaling up as an energy specialist company but also in addressing the weak financial structure of SK On, a battery company. In fact, SK On has recorded ten consecutive quarters of losses since its establishment, with a loss of around $216.9 million in just the first quarter of this year.
Regarding this, an official from SK Innovation announced, “We are reviewing various strategic options to strengthen business competitiveness,” and “No concrete decisions have been made yet.”
