SK Gas is accelerating the optimization of its business portfolio by merging with its PDH subsidiary, SK Advanced, following the asset securitization of the Ulsan GPS power plant in June. The merger aims to integrate the value chain from propane procurement to propylene production into a single management system to enhance synergies.
On August 26, SK Gas held a board meeting and approved the merger agreement with SK Advanced. SK Advanced is a wholly-owned subsidiary of SK Gas. The merger will proceed without issuing new shares, ensuring that the equity stakes of existing SK Gas shareholders remain unchanged.
The core of this merger is to unify the propane-propylene value chain under one management system. SK Gas has been procuring and supplying propane internationally based on over 40 years of accumulated global networks and trading capabilities. SK Advanced produces propylene, a basic petrochemical raw material, through the PDH (propane dehydrogenation) process.
After reviewing the economic viability and growth potential of the integrated value chain, SK Gas determined that merging the two companies would enhance the competitiveness of the entire value chain.
Post-merger, decision-making across the entire business, including raw material procurement and product production and sales, will be centralized. This is expected to strengthen procurement competitiveness, improve operational efficiency and sales competitiveness, and achieve financial synergies through streamlined funding and financial management.
An SK Gas official stated, "This merger is a continuation of our business portfolio optimization following the asset securitization of the Ulsan GPS in June. We plan to optimize the value of our existing businesses and assets while continuously seeking new growth opportunities, transitioning from LPG to LNG and connecting our assets."
Meanwhile, SK Gas reported a second-quarter revenue of 2.313 trillion won and an operating loss of 439 billion won, marking a return to losses.
* This article has been translated by AI.
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