SK On announced on the 1st that it successfully completed the merger of SK On, SK Trading International, and SK Entum, as it finalized the merger process with SK Entum, which was announced last July. The name of the merged entity is confirmed as SK On.
Previously, in November of last year, SK On merged with SK Trading International. After the merger, the existing SK Trading International operates as a corporate independent company (CIC) under the new name 'SK On Trading International.'
SK Entum operates as the terminal division of SK On Trading International. SK Entum is a specialized company in the storage of liquid cargo and handling of inflows and outflows with the largest business tank terminal in the country.
SK On explained that it plans to enhance its raw material procurement competitiveness by utilizing the capabilities and global network of SK On Trading International. In particular, it noted that it expects to reduce raw material purchasing expenses and efficiently respond to market risks such as price volatility and transaction risk through the trading know-how of SK On Trading International.
The merger is also expected to improve SK On's financial structure. As of 2023, SK On's revenue and asset size, which were at 13 trillion won and 33 trillion won, respectively, will grow to 62 trillion won and 40 trillion won after the merger.
SK On anticipates an increase in its earnings before interest, taxes, depreciation, and amortization (EBITDA), which stood at approximately 500 billion won annually. This stability in revenue generation is attributed to the merged companies' lower sensitivity to external environmental changes and the limited capital expenditure (CAPEX) required.
Basing on the improved financial structure, SK On emphasized that it will focus on enhancing manufacturing competitiveness, research and development capabilities, and diversifying its product portfolio to secure a differentiated competitive advantage.
The trading business plans to expand from its existing oil-centric structure to trading in battery minerals and materials such as lithium, nickel, and cobalt. It also aims to enhance trading efficiency and profitability by leveraging existing assets from SK Entum's tank terminal.
A representative from SK On said, 'Through this merger, we aim to secure a differentiated competitive edge and establish a foundation for long-term growth,' adding that 'the goal is to transform into a global battery and trading company with both growth and stability.'