SK Innovation will merge with SK IE Technology (SKIET), its subsidiary that produces secondary battery separators, through an absorption-type merger. The move is being assessed as effectively bringing to a close the business restructuring (rebalancing) that SK Innovation has been pursuing in earnest since 2024.

On the 25th, SK Innovation announced via a regulatory filing that its board of directors had approved the agenda for the absorption-type merger of SKIET. The merger will proceed as an absorption-type merger in which SK Innovation issues new shares and allocates them to SKIET shareholders. SK Innovation will be the surviving company and SKIET will be dissolved. The merger ratio between the two companies is 1 to 0.1174540, under which 0.11 SK Innovation common shares will be allotted for each SKIET common share. The two companies intend to obtain approval for the merger from the SK Innovation board of directors and the SKIET general shareholders’ meeting on November 24, and then complete the relevant procedures with January 1 next year set as the merger date. The new merger shares will be listed on January 18 next year.

This measure is intended to mitigate the financial burden of the separator business, which has deteriorated due to factors such as the prolonged stagnation (“chasm”) in global electric vehicle demand, delayed demand recovery in major markets including North America, and intensifying price competition following the entry of Chinese competitors into the global market. SKIET was launched in April 2019 through a physical spin-off from SK Innovation and listed in 2021, but has since experienced declining profitability and difficulties in raising capital as business conditions worsened.

The company plans, after the merger, to reduce financing costs and combine SK Innovation’s research and development capabilities with SKIET’s product development capabilities to further expand into businesses such as separators for energy storage systems (ESS).

The business community is interpreting this decision as the “final chapter” of the business rebalancing led by SK Innovation. Previously, SK Innovation had pursued both structural reorganization and asset securitization to ease the funding shortage in its battery business and secure financial soundness. The starting point was the merger between SK Innovation and SK E&S, which was officially launched in November 2024. Through this, it established a combined entity with assets of KRW 100 trillion and secured the financial soundness of the headquarters.

Consolidation among affiliates was also carried out to enhance the self-sustainability of the battery business. SK On successively absorbed SK Trading International in November 2024 and SK Enterm in February 2025. In November 2025, it also merged SK Enmove, a lubricants subsidiary, into SK On. In addition, by restructuring BlueOval SK, its U.S. battery joint venture with Ford, and converting the Tennessee plant into an SK On standalone entity, it reduced the burden of consolidated borrowing.

Large-scale asset securitization followed as well. In September 2025, SK Innovation raised KRW 3 trillion through the securitization of equity stakes in liquefied natural gas (LNG) power generation companies such as Yeoju Energy Service and Narae Energy Service, and in December of the same year it secured approximately KRW 560 billion in cash by selling a 50% stake in the Boryeong LNG Terminal. It also proceeded with the sale of the site of the Coway Energy Service headquarters building.

An SK Innovation official stated, “Through this merger, the company plans to strengthen financial stability and streamline its business structure, thereby enhancing the mid- to long-term competitiveness of the separator business,” adding, “The company will do its utmost to ensure that this merger leads to a recovery in business competitiveness and an increase in shareholder value.”

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