Electric Vehicle Companies, SK On and SK Enmove, Combine Forces in Pursuit of Electrification Advancements
SK Innovation, a leading South Korean energy company, has announced a significant merger that is set to reshape its position in the global electrification market. The merger, scheduled to launch on November 1, 2025, will unite SK On (SK Innovation's EV battery subsidiary), SK Enmove (focused on lubricants and immersion cooling solutions), and another unnamed company.
The merger is expected to unlock synergies in the core segments of EV batteries and energy storage systems (ESS), aiming to create a more competitive and integrated entity. This integration will enhance product performance, such as improving battery safety through advanced immersion cooling technologies, and accelerate growth by combining complementary technologies and customer bases.
Financially, the merger is accompanied by a large capital injection. SK Innovation plans to raise KRW 8 trillion (around USD 5.7 billion) by 2025, which will strengthen the merged entity’s financial structure and support aggressive expansion. The company aims to achieve an EBITDA of KRW 20 trillion (€12.6 billion) by 2030, with the merged company expected to realize an EBITDA increase of KRW 800 billion (approx. €502 million) in 2025 and cumulative business synergies contributing an additional KRW 200 billion (€125.6 million) by 2030.
Jang Yong-ho, the managing president, aims to improve EBITDA and reduce net debt to achieve top-tier financial stability at home. To achieve this, SK Innovation will optimize assets worth over 1.5 trillion won (€942 million) by 2025, primarily through the disposal of non-core assets. The company will also raise an additional 3 trillion won (€1.9 billion) by the end of the year.
SK Innovation will further solidify its control over the EV battery subsidiary, SK On, by buying back all convertible preferred shares held by financial investors in SK On for 3.588 trillion won (€2.25 billion). The newly merged company will receive an immediate capital injection of 1.7 trillion won (around €1 billion) as a result.
Lee Seok-hee, CEO of SK On, stated that the expected synergies from the merger will lead to higher global market competitiveness. The merger aims to support future growth in key areas such as high-performance EV batteries, advanced thermal management, and global energy storage solutions. The strategic goal is to maintain net debt below the targeted EBITDA of 20 trillion won (€12.6 billion) by 2030.
The merger follows previous consolidation efforts within SK Innovation's energy portfolio and is a strategic step to position SK Innovation as a top-tier energy company for the electrification era, responding to increased demand and competition in the global EV battery and ESS industries. The synergies are anticipated to come from the combination of customer bases, creating cross-selling opportunities, and supporting new package solutions such as integrated cooling and battery technologies.
In summary, the expected synergies from the merger include technological integration, financial strengthening, cost and operational efficiencies, and expanded business opportunities—all working together to sharpen SK Innovation's competitive edge in the global EV battery and ESS market.
The merger will incorporate advanced immersion cooling technologies from SK Enmove, aiming to improve battery safety in SK On's EV batteries. The merged entity will also focus on harnessing synergies in technology to create a more competitive and integrated company in the global electrification market.
