Seoul: SK Innovation Co. and its affiliate SK E and S Co. have officially merged, creating the largest private energy entity in the Asia-Pacific region, the company announced on Friday. The newly formed integrated company, retaining the name SK Innovation Co., combines assets totaling 105 trillion won (US$76 billion) and reports sales of 88 trillion won.

According to Yonhap News Agency, the merger is designed to bolster the competitiveness of SK Innovation’s energy portfolio by integrating its oil and battery businesses with SK E and S’ liquefied natural gas (LNG) and renewable energy operations. SK Innovation now holds an 89.52 percent stake in SK On, recognized as South Korea’s third-largest car battery manufacturer.

This merger is part of a broader restructuring initiative by SK Group, South Korea’s second-largest conglomerate, as it navigates a prolonged economic slowdown and uncertainties in the petrochemical sector, alongside challenges in the electric vehicle (EV) market. The integrated entity is set
ting its sights on achieving 20 trillion won in earnings before interest, taxes, depreciation, and amortization (EBITDA) by 2030, a significant increase from the current 6 trillion won.

S and P Global Ratings upgraded SK Innovation’s credit rating from BB+ to BBB- on Friday, citing the merger’s potential to expand SK Innovation’s business scale. The agency noted that the stable nature of SK E and S’ operations could mitigate earnings volatility associated with the cyclical nature of the oil and chemical sectors. Additionally, cash flow from city gas and power generation is expected to support the company in meeting its investment requirements.

The completion of the merger between SK On and SK Trading International Co. was also announced on the same day, with SK On’s merger with SK Enterm planned for February 1.