1 Aug 2025
SK Innovation has announced a major business and financial restructuring to strengthen its position as a leading total energy company in the electrification era. The South Korean energy giant will merge its electric vehicle (EV) battery subsidiary, SK On, with lubricants and thermal management specialist SK Enmove, while undertaking a large-scale capital expansion to improve financial stability and drive long-term growth.
SK Innovation has announced a major business and financial restructuring to strengthen its position as a leading total energy company in the electrification era. The South Korean energy giant will merge its electric vehicle (EV) battery subsidiary, SK On, with lubricants and thermal management specialist SK Enmove, while undertaking a large-scale capital expansion to improve financial stability and drive long-term growth.
On 30 July, the boards of SK Innovation, SK On, and SK Enmove approved the merger, with the combined entity set to launch on 1 November 2025. SK On will absorb SK Enmove, creating a platform to accelerate synergies in customer networks, product integration, and market expansion across EV batteries, energy storage systems (ESS), immersion cooling, and lubricants.
The merger is expected to strengthen SK On’s capital structure, raising KRW 1.7 trillion (USD 1.31 billion) this year and adding KRW 800 billion (USD 615 million) in EBITDA. By 2030, business synergies are projected to contribute an additional KRW 200 billion (USD 154 million) in EBITDA. The integration will also enable new bundled solutions, such as combining immersion cooling with battery systems.
SK On CEO Lee Seok-hee said the merger will enhance global competitiveness through technological and commercial collaboration, with the goal of achieving over KRW 10 trillion (USD 7.69 billion) in EBITDA by 2030 while lowering the debt ratio to below 100%.
Major capital expansion to reinforce financial health
Alongside the merger, SK Innovation plans a KRW 8 trillion (USD 6.15 billion) capital-raising programme in 2025. This includes KRW 2 trillion (USD 1.54 billion) from SK Innovation’s third-party allotment, KRW 700 billion (USD 538 million) from perpetual bonds, KRW 2 trillion (USD 1.54 billion) from SK On’s third-party allotment, and KRW 300 billion (USD 231 million) from SK IE Technology’s (SKIET) capital injection—totalling KRW 5 trillion (USD 3.85 billion) in immediate expansion. An additional KRW 3 trillion (USD 2.31 billion) will be raised by year-end.
SK Inc. will contribute KRW 400 billion (USD 308 million) to the capital raise, with the remaining KRW 1.6 trillion (USD 1.23 billion) covered via Price Return Swap (PRS) agreements with financial institutions, reducing the outflow of internal funds.
In addition, SK Innovation will acquire all convertible preferred shares in SK On from financial investors, worth KRW 3.588 trillion (USD 2.76 billion). Earlier in July, it also bought all 12 million shares of SK Enmove from private investors.
The company is simultaneously implementing an asset optimisation programme aimed at cutting over KRW 1.5 trillion (USD 1.15 billion) in debt through divestment of non-core assets. Together, these measures are expected to reduce net debt by more than KRW 9.5 trillion (USD 7.31 billion) this year.
Long-term vision: growth with financial discipline
This restructuring builds on SK Innovation’s broader transformation, which began last year with the integration of its liquefied natural gas (LNG) and energy trading operations. The company is consolidating its energy value chain—from oil and chemicals to electricity, batteries, and integrated energy solutions.
By 2030, SK Innovation aims to deliver KRW 20 trillion (USD 15.38 billion) in EBITDA while keeping net debt below KRW 20 trillion. Executive President Jang Yong-ho said the strategy reflects a commitment to combining profitability with growth potential, anchored in a solid financial foundation.
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