SK On, the battery manufacturing segment of South Korea’s SK Group, has finalized a three-way merger, establishing itself as a “global battery & trading company.” This tactical reorganization seeks to create synergies and propel long-term expansion within the organization.
As the fifth-largest electric vehicle battery manufacturer globally, SK On completed its merger with SK Enterm, following its earlier integration with SK Trading International in November of last year. The merger, initially announced in July, results in the combined entity continuing under the SK On name. SK Trading International now operates under a company-in-company (CIC) system as “SK On Trading International,” while SK Enterm, South Korea’s leading commercial tank terminal operator, remains part of SK On Trading International.
The merger enhances SK On’s capabilities in raw material sourcing and financial stability, strengthening its competitive position in the battery industry. By integrating SK On Trading International’s expertise in crude oil and petroleum trading, SK On aims to optimize raw material procurement, reduce purchasing costs, and mitigate market risks such as price volatility. Additionally, SK On Trading International’s global network is expected to support the expansion into battery raw materials, including lithium, nickel, and cobalt.
Financially, the merger is projected to significantly bolster SK On’s revenue and asset base, which are anticipated to rise from 13 trillion won and 33 trillion won to 62 trillion won and 40 trillion won, respectively, by the end of 2023. The combined entity is expected to contribute approximately 500 billion won in EBITDA, benefiting from a more resilient profit structure less susceptible to external market fluctuations and requiring limited capital expenditures.
Post-merger, the trading segment is set to diversify beyond petroleum products to include battery-related materials, leveraging SK Enterm’s tank terminal assets for more efficient and profitable operations. SK On plans to maintain independent management within the CIC framework while fostering collaboration and communication across the merged entities, in line with SK Group’s “separately and together” philosophy.
An SK On spokesperson stated, “Through the merger, we aim to build a foundation for long-term growth by creating synergies and securing a distinct competitive edge. SK On will evolve into a global battery and trading company, balancing growth potential with stability.”
Source: SKinno News
