■ Merges with SK Enterm after SK Trading International

■ Strengthens raw material sourcing capability, financial stability

■ Creating synergies as global battery & trading company

SK On, the battery manufacturing arm of South Korea’s SK Group, announced today it has completed a three-way merger, officially setting sail as a “global battery & Trading company” in a move to create synergies and momentum for sustainable growth.

SK On, the world’s fifth largest electric vehicle battery maker, said it merged with SK Enterm, completing the three-way merger that was first revealed last July. The newly merged entity will operate under the name SK On.

SK On had previously merged with SK Trading International last November. Since then, SK Trading International has been operating under a company-in-company (CIC) system, using the name “SK On Trading International.”

SK Enterm, South Korea’s largest commercial tank terminal operator, will continue its operations as part of SK On Trading International.

Through this merger, SK On aims to strengthen its fundamental competitiveness in the battery business by enhancing raw material sourcing capabilities and financial stability. As for the trading business, the merger is expected to expand the business model and boost profitability by utilizing storage assets.

SK On plans to reinforce its raw material sourcing capabilities by leveraging SK On Trading International’s trading expertise and global network. SK On Trading International is South Korea’s sole trading company specializing in crude oil and petroleum products.

By leveraging SK On Trading International’s trading expertise, SK On expects to create synergies in lowering raw material purchasing costs, as well as mitigating market risk factors such as price volatility and other trading-related risks. It is also promising that SK On Trading International’s partners are considering entering the battery raw materials business.

The merger is also expected to enhance SK On’s profit structure. SK On’s revenue and assets* were valued at 13 trillion won and 33 trillion won, respectively, but are projected to increase to 62 trillion won and 40 trillion won following the merger. (※As of end-2023)

In particular, SK On expects to add approximately 500 billion won in EBITDA through the mergers. The merged entities are considered less sensitive to external market fluctuations and involve limited capital expenditures, positioning them to generate steady profits.

Through an enhanced profit structure, SK On plans to secure a distinct competitive edge by driving portfolio diversification, manufacturing competitiveness, and R&D capabilities.

After the merger, the trading business is well-positioned to expand beyond petroleum-based trading to include battery metals and materials, such as lithium, nickel and cobalt. In addition, it can pursue more efficient and profitable trading by leveraging SK Enterm’s tank terminal assets.

Taking into account the unique characteristics of each business, SK On will maintain independent management under the CIC system after the merger. The company will also focus on creating synergies guided by SK Group’s ‘separately and together’ philosophy, while addressing and overcoming challenges in the business environment. To achieve this, SK On will foster active communication and collaboration among members from each company.

“Through the merger, we aim to build a foundation for long-term growth by creating synergies and securing a distinct competitive edge,” an SK On spokesperson said. “SK On will evolve into a global battery and trading company, balancing growth potential with stability.”