South Korea’s SK Innovation announced it will merge its electric vehicle battery subsidiary SK On with thermal management and lubricants unit SK Enmove, aiming to strengthen its global position in the electrification market and improve financial resilience. The merger, approved by the boards of all three companies on July 30, will take effect on November 1, 2025.
The move is part of a broader strategy to build an integrated energy portfolio. “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 SK On CEO Lee Seok-hee.
The combined company will benefit from SK On’s position in electric vehicle (EV) batteries and energy storage systems (ESS), along with SK Enmove’s experience in cooling and lubricants. The merger is expected to enhance SK On’s financial structure with a capital injection of KRW 1.7 trillion (about €1 billion), and an estimated EBITDA increase of KRW 800 billion (€502 million) in 2025. Cumulative synergies are projected to exceed KRW 200 billion (€125.6 million) by 2030.
The announcement follows earlier integration efforts across SK Innovation’s energy business, including the consolidation of SK E&S and LNG operations. “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,” said Executive President Jang Yong-ho.
To support the merged entity and broader transformation, SK Innovation plans to raise KRW 8 trillion (€5 billion) in capital. This includes KRW 2 trillion each from SK Innovation and SK On, KRW 300 billion from SK IE Technology, and KRW 700 billion in perpetual bonds. An additional KRW 3 trillion (€1.9 billion) is expected to be raised by the end of the year.
As part of its financial restructuring, SK Innovation will repurchase all convertible preferred shares of SK On from financial investors for KRW 3.588 trillion (€2.25 billion), strengthening its control over the EV battery subsidiary. The company also plans asset optimization measures worth over KRW 1.5 trillion (€942 million) in 2025, primarily through divestment of non-core assets.
The companies have previously worked together on technologies such as immersion cooling for batteries, showcased earlier this year in Seoul. SK Innovation expects the merger to enable cross-selling opportunities and new integrated offerings in battery and thermal management solutions.