1. What’s Happening at SK Innovation?

On July 25, 2025, SK Innovation released a public announcement regarding the potential merger of SK On and SK Enmove. While not yet confirmed, the company acknowledged it is exploring business portfolio restructuring to improve its financial structure, leaving the possibility of a merger open.

2. Why is This Merger Significant?

The potential merger of SK On (batteries) and SK Enmove (materials) is a pivotal event for SK Innovation’s future. Vertical integration could enhance the competitiveness of its battery business and improve its financial structure, but there are also risks, such as merger costs, short-term performance decline, and business disruption.

3. Positive and Negative Impacts of the Merger

  • Positive Impacts: Improved battery business profitability through synergies, strengthened financial structure, faster decision-making, and increased investment attraction.
  • Negative Impacts: Merger costs and risks, potential short-term performance decline, disruption to existing businesses, and potential antitrust issues.

4. SK Innovation’s Current Situation

Based on the Q3 2025 report, SK Innovation is facing declining profitability due to falling international oil prices and rising raw material costs. The high-interest rate environment also adds pressure to its financial stability, and the battery business continues to report losses despite its growth potential.

5. What Should Investors Do?

The company will announce the merger decision and specific plans on August 22, 2025. Investors should carefully review the announcement, analyze the potential for post-merger synergy creation and risk management measures, and then formulate their investment strategies accordingly. A cautious approach is recommended until further information is disclosed.