South Korean oil refining company SK Innovation and its energy affiliate SK E&S have agreed to merge, creating an energy company with assets totaling KRW 100 trillion ($72.5 billion). This merger positions the new entity as the largest private energy company in the Asia-Pacific region, addressing the challenges posed by economic downturns, sector uncertainties, and gaps in the electric vehicle market. The merger aims to create synergies in three main areas: enhancing portfolio competitiveness, strengthening financial and profit frameworks, and ensuring sustained growth momentum.

Established in 1962, SK Innovation has evolved from South Korea’s first oil refining company into a diversified entity involved in petrochemicals, lubricants, oil exploration, and future energy sectors. SK E&S, spun off from SK Innovation in 1999, has become South Korea’s leading private liquefied natural gas (LNG) company and is transitioning towards a greener portfolio.

The merged company's portfolio will encompass a wide range of energy sources and solutions, including ammonia, batteries, chemicals, city gas, hydrogen, immersion cooling, LNG, oil, power, and renewable energy. At the same time, SK On, a subsidiary of SK Innovation, will consolidate with SK Trading International and SK Entercom to strengthen competitiveness in raw materials and secure long-term business viability.

SK Innovation CEO and President Park Sang-kyu commented, "The merger of these two companies marks a structural and fundamental innovation aimed at achieving sustainable growth by actively adapting to the evolving energy industry landscape. Through this merger, SK Innovation will grow into a ‘Total Energy & Solution Company’ that leads Korea’s energy industry from the present into the future.”

SK E&S CEO and President Choo Hyeong-wook remarked, "This merger will bolster the current business strengths of both entities while also establishing growth catalysts for pivotal future energy ventures. Leveraging synergies from the merger, SK E&S will advance its green portfolio focused on its four core sectors and take the lead in shaping the future energy market."

In a related update, Posco International has recently finalized the construction of South Korea's inaugural privately-operated LNG terminal, Gwangyang LNG Terminal 1, marking a significant expansion of the nation's LNG infrastructure.

SK Innovation Co., Ltd. serves as an intermediate holding company within the SK Group, specializing in petroleum, alternative energy, and oil exploration. It operates via eight primary subsidiaries: SK Energy, SK Geo Centric, SK On, SK Enmove, SK Incheon Petrochem, SK Trading International, SK IE Technology, and SK Earthon. SK Energy was formed in 2007 when South Korea's leading refiner, SK Corporation, was split into two entities: an energy operation (SK Energy) and a holding company (SK Holdings). SK Energy took over the energy and chemical businesses, while SK Holdings focused on investing in subsidiaries and the life sciences sector.