SK Innovation to absorb subsidiary SK IE Technology in 2027 merger

Deal structure and terms

SK Innovation will absorb its separator business subsidiary SK IE Technology (SKIET). For SK Innovation the transaction proceeds as a small-scale merger and for SKIET as a general merger; SK Innovation will issue new shares to SKIET shareholders. The merger ratio is set at 1 to 0.1174540, equating to 0.11 SK Innovation common shares per SKIET common share, calculated from one-month and one-week weighted average closing prices and the most recent closing prices under relevant capital markets rules.

Schedule

Each company’s board approved the proposal on August 25. Remaining approvals are scheduled for November 24 via SK Innovation’s board and SKIET’s general shareholders’ meeting. The merger date is January 1, 2027, and the new SK Innovation shares will be listed on January 18, 2027. As a small-scale merger for the parent, exercise of appraisal rights will be omitted and shareholder approval replaced by a board resolution.

Rationale

The merger will reincorporate the separator business into SK Innovation to secure financial stability, mitigate business and financial risks, and improve operational efficiency. SKIET was spun off in April 2019 and listed in May 2021 as a producer of LiBS (lithium‑ion battery separator). Since the spin‑off the market environment has shifted: global EV growth has slowed, demand recovery in key markets such as North America has been delayed, and Chinese competitors have intensified price competition, limiting near‑term profitability and standalone financing capacity.

Expected effects

SK Innovation expects the integration to reduce overlapping and financing costs, improve operational efficiency, and combine R&D and product development capabilities to strengthen competitiveness, including future expansion into separators for energy storage systems (ESS).