Shareholders of South Korea’s SK Innovation have approved the previously announced merger deal with SK E&S.
Last month, the two firms agreed to merge into one firm, creating the largest private energy entity in South Korea with combined assets of 100 trillion won ($74.8 billion).
According to a statement by SK Innovation, the merger agreement was ratified during its extraordinary general meeting held on August 27, with an 85.75 percent approval rate from the attending shareholders.
The merger required a special resolution, necessitating the consent of at least two-thirds of the attending shareholders as well as one-third of the total issued shares.
The merger ratio between the two companies is set at 1:1.1917417, calculated on the corporate values of SK Innovation and SK E&S.
With the merger now approved, the newly combined entity is set to officially launch 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 is anticipated to enhance the competitiveness of the energy portfolio by integrating SK Innovation’s oil and battery businesses with SK E&S’s liquefied natural gas (LNG) and renewable energy businesses, 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 ($1.8 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, 7 GW 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.