SK Innovation Falls 3% After Hours on SKIET Merger Plan

SK Innovation (096770) fell more than 3% in after-hours trading after the company said it would absorb its separator-making subsidiary SK IE Technology, or SKIET. Analysts said the drop reflected concerns over how the merger with SKIET, which has posted losses for several years, would affect SK Innovation's financial structure.

SK Innovation traded at 125,700 won in the after-hours session, down 3.38% from its regular-session close of 130,100 won, according to Nextrade on the 25th.

SK Innovation said in a regulatory filing that its board decided after the market close to absorb SKIET. SK Innovation will be the surviving entity, and SKIET will cease to exist after the merger. The merger ratio was set at 1 to 0.1174540, meaning SKIET shareholders will receive 0.1174540 new SK Innovation shares for each common share they hold.

SKIET closed the regular session at 15,360 won, up 0.33% from the previous trading day.

The market appeared to focus first on SK Innovation taking on SKIET's weak earnings and financial burden rather than on the longer-term efficiency gains from the merger. SKIET has struggled to raise funds on its own as slowing electric vehicle demand and intensifying price competition with Chinese rivals eroded its profitability and cash generation. According to SKIET's half-year report, operating profit of 50.1 billion won in 2023 swung to a loss of 290 billion won in 2024, followed by losses of 246 billion won in 2025 and 136 billion won in the first half of this year.

SK Innovation plans to use the merger to ease SKIET's business and financial risks and to cut overlapping and financing costs. The company also intends to combine the two firms' research and development capabilities to expand new businesses, including separators for energy storage systems, or ESS.

The two companies plan to complete the merger on January 1 after winning approval on November 24 at SK Innovation's board meeting and SKIET's shareholder meeting, respectively.