SK Innovation merges its EV battery subsidiary SK On with cooling and lubricants unit SK Enmove to streamline operations and improve financial resilience. A capital raise of 8 trillion South Korean won (about 5 billion euros) supports growth in electrification and energy solutions.
Parent company SK Innovation has confirmed the merger. It states that the goal is to reinforce competitiveness in the global electrification market. The boards of all three companies approved the merger plan on 30 July, with the integrated entity to be launched on 1 November 2025.
SK On’s strengthened financial position and access to broader industrial capabilities from SK Enmove are expected to support future growth in key areas such as high-performance EV batteries, advanced thermal management, and global energy storage solutions.
The merger follows earlier consolidation efforts within SK Innovation’s energy portfolio, including the integration of SK E&S and LNG operations into its core petroleum and battery businesses. As a result, the company is building a vertically integrated energy structure aimed at supporting sustained electrification growth in key markets.
According to the company, the merger will unlock synergies in SK On’s core EV battery and energy storage system (ESS) segments by combining customer bases, enabling cross-selling opportunities, and supporting new package solutions such as integrated cooling and battery technologies.
“With the expected synergies from the merger, including the integration of both companies’ technological and business capabilities, we anticipate showcasing a higher level of competitiveness in the global market,” said Lee Seok-hee, CEO of SK On.
The two subsidiaries have already worked together in the past. For example, SK On presented its latest technologies related to battery safety at a trade fair in Seoul, South Korea, earlier this year. That included immersion cooling technology, which is a result of the collaboration between SK On and SK Enmove.
The newly merged entity is expected to strengthen SK On’s financial structure through an immediate capital injection of KRW 1.7 trillion (roughly 1 billion euros) and an estimated EBITDA increase of KRW 800 billion (€502 mn) in 2025. SK Innovation projects that cumulative business synergies will contribute over KRW 200 billion (€125.6 mn) in additional EBITDA by 2030.
The merger is part of a broader rebalancing of SK Innovation’s business and financial portfolios, backed by a capital expansion of KRW 8 trillion (about 5 bn euuros). This includes KRW 2 trillion (€1.26 bn) raised by SK Innovation through third-party allotment, KRW 2 trillion by SK On, and KRW 300 billion (€188 mn) by SK IE Technology (SKIET), supplemented by KRW 700 billion (€439.5 mn) in perpetual bonds. The company also plans to raise an additional KRW 3 trillion (€1.9 bn) by year-end.
SK Innovation’s strategic objective is to achieve KRW 20 trillion in EBITDA by 2030 while maintaining net debt below KRW 20 trillion (€12.6 bn). Executive President Jang Yong-ho stated, “Through this dual-track business and financial portfolio rebalancing, we aim to improve EBITDA and reduce net debt to achieve top-tier financial stability domestically.”
The restructuring includes asset optimisation measures worth over KRW 1.5 trillion (€942 m) in 2025, primarily through divesting non-core assets. Additionally, SK Innovation has agreed to repurchase all convertible preferred shares of SK On held by financial investors for KRW 3.588 trillion (€2.25 bn), further consolidating its control over the EV battery subsidiary.
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