SK Innovation's shares fell by over 14% in early trading after the company announced it would absorb its battery separator subsidiary, SK IE Technology (SKIET). Meanwhile, SKIET's stock rose by more than 5%, reflecting mixed market reactions.
As of 9:25 a.m. on the Korea Exchange, SK Innovation's shares were trading at 107,400 won, down 14.08% or 17,600 won from the previous trading day. In contrast, SKIET's shares were up 5.28% at the same time.
Both companies held board meetings the previous day, where they approved the merger plan. SK Innovation will absorb SKIET, with SK Innovation remaining as the surviving entity and SKIET being dissolved.
The merger ratio was set at 1 to 0.1174540, meaning that for each share of SKIET, shareholders will receive approximately 0.117 shares of SK Innovation.
The companies plan to finalize the merger on January 1, following board and shareholder approvals on November 24. New shares of SK Innovation resulting from the merger are expected to be listed on January 18.
Market analysts view the merger as a strategy to enhance operational efficiency and financial stability by integrating SKIET, which has been struggling with poor performance. However, there are concerns that absorbing a loss-making subsidiary could increase SK Innovation's financial burden, which may have contributed to the decline in its stock price.
SKIET has faced declining profitability due to a slowdown in the electric vehicle market and intensified price competition with Chinese firms, reporting operating losses of 291 billion won in 2024 and 246.4 billion won the previous year, along with a 63.5 billion won operating loss in the second quarter of this year.
* This article has been translated by AI.
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