SK Innovation (096770) will absorb its battery separator subsidiary SK IE Technology (SKIET) in a merger that reshapes its business structure amid a slowing electric-vehicle market and aggressive pricing by Chinese rivals. The move is also seen as part of a broader portfolio rebalancing across SK Group.
SK Innovation (096770) and SKIET (034730) said on the 25th that their respective boards had approved the merger. The merger takes effect on January 1, with new merger shares to list on the 18th of the same month. The two companies set a merger ratio of 1 to 0.1174540, meaning holders of one SKIET common share will receive 0.11 SK Innovation common shares. SK Innovation will issue the new merger shares and deliver them to SKIET shareholders.
For SK Innovation, the surviving company, the deal follows a small-scale merger procedure, while for SKIET, the company being dissolved, a general merger procedure applies. Under the small-scale merger rules, SK Innovation will skip the process for shareholders to exercise appraisal rights, and board approval will substitute for a shareholder vote. SKIET plans to seek approval of the merger at a shareholder meeting on November 24.
SK Innovation decided on the absorption to resolve financial risk as the business environment around SKIET deteriorated. SKIET was launched in April 2019 through a spin-off of SK Innovation's materials business and listed on the KOSPI in May 2021, operating a lithium-ion battery separator (LiBS) business that supplies a key material for electric-vehicle batteries.
However, slowing growth in the global electric-vehicle market, a delayed demand recovery in major markets such as North America, and intensifying price competition driven by advances among Chinese rivals have limited improvement in profitability and cash generation while eroding SKIET's capacity to raise its own funds. 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.
After the merger, SK Innovation plans to cut redundant costs and financing expenses and combine the two companies' research and development capabilities to strengthen competitiveness in new businesses, including expanding its separator business for energy storage systems (ESS). "Through the merger, we plan to strengthen financial stability, improve the efficiency of our business structure and bolster the mid- to long-term competitiveness of the separator business," an SK Innovation official said. "We will do our utmost to ensure that this merger leads to a recovery in business competitiveness and enhanced shareholder value."
