SK Gas (018670.KS) will absorb SK Advanced, its propane dehydrogenation (PDH) subsidiary, unifying a petrochemical value chain that runs from propane procurement through propylene production. The move follows the securitization of assets at the Ulsan GPS power plant in June, and points to an accelerating effort to optimize its business portfolio and improve financial efficiency.
SK Gas said its board approved a merger agreement with SK Advanced, a wholly owned subsidiary, at a meeting on the 26th. The deal will be carried out as a small-scale merger without a new share issue, leaving the ownership stakes of existing SK Gas shareholders unchanged.
The core of the merger is bringing the propane and propylene value chains under a single management structure. SK Gas procures and supplies propane on a stable basis, drawing on its global network and trading capabilities. SK Advanced has produced propylene, a basic petrochemical feedstock, through the PDH process.
Once the merger is complete, decisions across raw material procurement, production and sales will be consolidated. SK Gas expects the integration to strengthen its competitiveness in sourcing, operations and sales, while generating financial synergies such as lower funding costs from centralized financing and treasury management.
"By combining business structures that had been run separately, we can eliminate internal inefficiencies and speed up decision-making in line with rapidly changing market conditions," an SK Gas official said.
