[Click eStock] "SK, Expecting Synergy with SK Materials"

Combining SK's Global Investment Capabilities and SK Materials' Business Development Expertise
Samsung Securities "Maintains SK Target Price at 420,000 KRW"

SK REITs (SK Entrusted Management Real Estate Investment Company) will enter the KOSPI market next month. Photo of SK Group headquarters, SK Seorin Building in Jongno-gu, on the 18th. Photo by Moon Honam munonam@

[Asia Economy Reporter Gong Byung-sun] SK is pushing forward with a merger with SK Materials. It is expected that synergies between SK Materials' business divisions and SK's unlisted subsidiaries will become more visible in the future.

According to Samsung Securities on the 23rd, SK and SK Materials each held board meetings and announced on the 20th that they had resolved to pursue a merger between the two companies. Through the merger, the two companies plan to combine SK's global investment capabilities with SK Materials' business development capabilities to focus on improving management efficiency in the advanced materials sector and enhancing shareholder value of the merged entity.

The merger will be carried out by SK Materials physically splitting off all business divisions such as specialty gases to create a new company, and merging the remaining holding company business division with SK. The newly established SK Materials company will focus on strengthening business competitiveness and expertise in the advanced materials sector. SK will absorb and merge SK Materials through a small-scale merger by issuing new shares and exchanging them for SK Materials' shares, with 1 SK common share allocated for every 1.58 SK Materials common shares.

The merger is expected to proceed as planned. If about 18.2% of SK Materials shareholders request a buyout, the merger contract could be canceled. However, considering that SK's stake in SK Materials is 49.1% and its treasury stock ratio is also 15.1%, the possibility of contract cancellation is considered low.

This merger is expected to have a positive effect on SK's stock price. Samsung Securities analyst Yang Il-woo explained, "It is advantageous for SK to make larger-scale investments compared to SK Materials," and added, "Synergies between SK Materials' business divisions and SK's other unlisted subsidiaries will become more visible." Additionally, there is speculation that similar transactions could actively take place with other subsidiaries in different industries besides SK Materials.

Accordingly, Samsung Securities maintained its 'Buy' rating on SK with a target price of 420,000 won. The closing price on the 20th was 259,500 won.

This content was produced with the assistance of AI translation services.