South Korea’s SK Innovation, parent of the country’s largest oil refiner and battery maker SK On, is expected to pursue a merger with energy affiliate SK E&S, resulting in a 106 trillion won ($76.81 billion) asset company, a South Korean newspaper reported on Thursday.
Shares in SK Innovation rose more than 10% on Thursday morning.
The merger, which company executives are expected to decide on in late June pending shareholder approval, is partly to shore up loss-making battery maker SK On by combining with a profitable company that has a stronger balance sheet, newspaper Chosun Ilbo reported, citing unnamed industry sources.
The move comes as SK Group, South Korea’s second-largest conglomerate by assets after Samsung, is considering reducing the number of its 219 affiliates and rethinking new investments except in artificial intelligence and chips, Chosun added.
SK Inc, SK Group’s holding company, said nothing has been decided on the matter at the moment. SK Innovation declined comment. A spokesperson for SK E&S did not respond immediately to a request for comment.
