'Unified SK Innovation' Officially Launched... Sets Sail as 'Asia-Pacific's Largest Private' Energy Company

Completion of merger procedures with SK E&S over approximately 3 months
Official launch of merged corporation with assets worth 105 trillion won

The merged entity of SK Innovation and SK E&S, with assets totaling 105 trillion KRW (as of the first half of this year), officially launched on the 1st. After completing preparation procedures over about three months since the merger announcement in July, the largest private energy company in the Asia-Pacific region was established.

The merged entity of SK Innovation and SK E&S, with assets totaling 105 trillion won (as of the first half of this year), has officially launched. After about three months of preparation following the merger announcement in July, the largest private energy company in the Asia-Pacific region has been established. The photo shows the SK Seorin Building in Jongno-gu, Seoul, where SK Innovation's headquarters is located. Photo by Kang Jin-hyung

On this day, SK Innovation completed the merger procedures with its subsidiaries SK On and SK Trading International along with the merger with SK E&S. By February 1 next year, the merger with SK On and SK Entum is also expected to be completed.

As a result, SK Innovation has built a portfolio encompassing current and future energies, including petroleum energy, chemicals, LNG (liquefied natural gas), electricity, batteries, and renewable energy. Going forward, it plans to evolve and develop into a 'Total Energy & Solution Company' that integrates each business and capability to provide customized energy solutions responding to diverse energy demands.

A Mega Integrated Energy Company... Building a Portfolio with Differentiated Competitiveness

The newly launched SK Innovation merged entity is evaluated as having built a portfolio capable of proactively responding to all energy industry changes from the present to the future, compared to other mega global integrated energy companies. This is because it has been reborn as a company with a stable portfolio across major energy businesses such as ▲petroleum ▲gas ▲electricity by adding the LNG value chain, which SK E&S was the first private company to integrate and complete, to the competitiveness of the existing petroleum and chemical businesses.

Moreover, the merged entity has secured a foundation to maintain leadership in the future eco-friendly energy market, including batteries, renewable energy, hydrogen, and energy solutions. Industry analysis notes that among global private energy companies with assets exceeding 100 trillion KRW, few have such a business structure.

In particular, the LNG value chain has been the basis for SK E&S to generate stable operating profits exceeding 1 trillion KRW annually despite the sharp volatility in the global energy market. It is expected to serve as a solid pillar for securing stable profitability and investing in future businesses for the merged entity.

After the merger, the existing SK E&S will operate as a company-in-company (CIC) within SK Innovation. The new trade name will be 'SK Innovation E&S.' This is evaluated as a system that maximizes integration synergy while maintaining the four core business competitiveness of the existing SK E&S's 'green portfolio.'

SK On will also operate as a CIC, renaming the merged SK Trading International as 'SK On Trading International.' Through this merger, it plans to further enhance its core business competitiveness by improving battery raw material procurement competitiveness and strengthening financial soundness.

'Merger Synergy' and New Organization for 'Future Growth'

Right after announcing the merger push in July, SK Innovation launched the 'Integrated Synergy Promotion Team' to accelerate the creation of business synergies. The team selected ▲LNG value chain ▲trading ▲hydrogen ▲renewable energy as the four 'Quick-Win' business areas and began concrete commercialization.

First, it is reviewing the establishment of self-power generation facilities within the SK Ulsan Complex (CLX) and the direct import of LNG. This is expected to improve the stability of power production and supply and reduce costs. Additionally, a project is underway for SK Innovation to directly secure and utilize condensate (volatile liquid hydrocarbons produced as byproducts during natural gas extraction) extracted from the Barossa Caldita (CB) gas field in Australia, developed by SK Innovation E&S. Through this, SK Innovation expects to strengthen its product sales competitiveness in the international crude oil market and improve operational efficiency.

Collaboration is also anticipated between the recently established 'Energy Solution Business Unit' of SK Innovation and the energy solution business operated by SK Innovation E&S. The energy solution business provides customized solutions for customers to ensure energy supply stability, cost reduction, and carbon reduction. The business unit is promoting projects that optimize power supply and demand for SK Group affiliates and provide total energy solutions to AI data centers. Furthermore, SK Innovation plans to continuously expand businesses such as SMR (Small Modular Reactor) and ESS (Energy Storage System) leveraging its research and development (R&D) capabilities.

Creating Greater Achievements for All Stakeholders and the National Economy Who Made the Merger Possible

The merged entity of SK Innovation and SK E&S, with assets totaling 105 trillion won (as of the first half of this year), has officially launched. After about three months of preparation following the merger announcement in July, the largest private energy company in the Asia-Pacific region has been established. The photo shows the SK Seorin Building in Jongno-gu, Seoul, where SK Innovation's headquarters is located. Photo by Kang Jin-hyung

SK Innovation expressed gratitude to all stakeholders, including shareholders, customers, partners, government agencies, and the public, who contributed to the merger that will serve as a foundation for sustainable growth. In particular, as a leading representative company in the Korean energy industry, it expressed its intention to maximize shareholder value and contribute to national economic development.

Park Sang-kyu, President of SK Innovation, sent an email letter to employees on this day, saying, "With this merger, we have established a balanced energy portfolio and can envision greater future growth," and urged, "Let us expand customers and markets further through business synergies."

He added, "Let us all, as one team, demonstrate the spirit of SKMS (SK Management System) and the SUPEX spirit to create the history of SK Innovation's stability and growth together."

Chu Hyung-wook, President of SK Innovation E&S, also expressed his ambition on the occasion of the merged entity's launch, stating, "Through an independent CIC system, we will maintain the competitiveness of existing businesses while creating merger synergies to enhance stability and growth. By combining the merged entity's diverse energy sources and business and technological capabilities, we will provide energy solution packages tailored to customers and regional characteristics and lead innovation in the energy industry."