South Korea’s SK Innovation and SK E&S have agreed to merge into one firm, creating the largest private energy entity in South Korea with combined assets of 100 trillion won ($72.6 billion).
According to a statement by SK Innovation issued on Wednesday, the boards of both of the firms approved the proposed merger.
The merger ratio of the two companies is 1 to 1.1917417.
If the merger is approved at the shareholders’ meeting scheduled for August 27, the merged company will be officially launched on November 1.
Following the completion of the merger, the shareholding of South Korean conglomerate SK, the largest shareholder of SK innovation, is expected to increase from 36.22 percent to 55.9 percent.
The merger will create a comprehensive energy company that encompasses the entire value chain of current energy (oil, LNG, etc.) and future energy (renewable energy, hydrogen, SMR, etc.), as well as electrification businesses such as batteries and ESS, SK Innovation said.
SK E&S
SK E&S was spun off from SK innovation in 1999 to become a city gas holding company, and since then the company has become the leading private LNG operator in Korea, the statement said.
In 2021, investment company KKR purchased 2.4 trillion won ($2 billion) worth of newly issued redeemable convertible preferred shares of South Korea’s SK E&S.
During the same year, SK E&S revealed ambitious plans for its LNG and hydrogen business by 2025.
The company aims to produce 280,000 tons of hydrogen, 7GW of renewables, and 10 million tons of “low-carbon” LNG by 2025.
Also, it aims to grow into a major global LNG provider that would supply 6 million tons and 10 million tons of LNG by 2023 and 2025, respectively.