On the 1st of next month, SKT to split into Telecom and Investment divisions... 'Split' approved at the extraordinary shareholders' meeting

[Asia Economy reporters Seulgina Jo and Minyoung Cha] SK Telecom will split into a telecommunications company and an investment company on the 1st of next month. Centered around the newly established investment specialist company, ‘SK Square,’ cross-border mergers and acquisitions (M&A) in the semiconductor as well as tech and platform sectors are expected to accelerate.

◇SK Square to Separate from SKT Next Month

On the morning of the 12th, SK Telecom held an extraordinary general meeting of shareholders at its headquarters in SK Telecom T Tower, Euljiro, Seoul, where it approved key agenda items including the ‘Approval of the Split Plan.’ Accordingly, the surviving company SK Telecom and the newly established company SK Square will officially launch on the 1st of next month. SK Telecom will focus on AI and digital infrastructure based on its existing wired and wireless telecommunications, while the new company will concentrate on ICT investments centered on semiconductors. The split ratio is 0.607 for SK Telecom and 0.392 for SK Square.

CEO Jung-ho Park stated at the shareholders’ meeting, “We will demonstrate growth capabilities through investments in semiconductor and platform innovation companies,” adding, “Both companies will build faster growth stories under the clear identities of ‘telecommunications’ and ‘investment.’” He also emphasized, “The main purpose of the split is to maximize shareholder value,” and explained, “Although SK Telecom has successfully diversified its portfolio, it has not been fully valued because it was assessed within the single frame of telecommunications. By separating telecommunications and ICT investments, the portfolio value will be confidently recognized by the market and returned to shareholders.”

This split is seen as a move to create future growth engines by establishing growth structures and investment foundations suitable for each sector centered on telecommunications and semiconductors, while also aiming to gain proper corporate valuation in the market. It also signals a declaration to actively pursue semiconductor investments, which have grown into a core cash cow for the group, replacing the subsidiary SK Hynix that faces many restrictions on business expansion due to governance structure.

The new company will be led by CEO Park, who concurrently serves as vice chairman of SK Hynix. Most of the new business areas, including SK Hynix, among SK Telecom’s subsidiaries have been organized under SK Square. CEO Park explained, “We aim to play the role of an ‘Investing Producer’ as a semiconductor and ICT investment specialist company.”

The surviving company SK Telecom aims to transform into an ‘AI and Digital Infrastructure Company.’ SK Broadband and SK Telink, which can create synergy with wired and wireless telecommunications businesses, have been organized under it. The new CEO is expected to be Yoo Sang-young, the head of the mobile network operator (MNO) business.

◇Global M&A in Semiconductors and More Expected

Following this split, global M&A activities in the tech and platform sectors are expected to increase soon. Earlier, CEO Park announced in meetings with domestic and international investors that the new company plans to invest 5 trillion won over three years after its launch.

The highest priority is semiconductor investment, focusing on creating synergy with SK Hynix, a subsidiary of the new company and a core growth engine of the group. The company will actively pursue a ‘bolt-on’ strategy by acquiring related or similar industry companies domestically and internationally to maximize synergy.

Notably, CEO Park, known as an ‘M&A strategist’ who led the acquisition of Hynix during the semiconductor crisis, visited the United States earlier this month ahead of the corporate split to meet investors in person. This is interpreted as both a preparatory step for large-scale M&A after the split and a move to attract global investment.

Currently, SK Square is exploring investment opportunities not only in high-tech areas such as semiconductors but also in ▲media, commerce, and mobility as ‘big tech’ (life platforms) and ▲digital healthcare and blockchain as ‘deep tech’ (global ICT). The goal is to increase the company’s net asset value to around 75 trillion won by 2025, which is three times the current level.

At the shareholders’ meeting, when meeting with reporters, he said, “When I go on overseas IR, the first words from shareholders are ‘thank you,’ which I appreciate,” adding, “We will strive to become a better company and support better growth.” When asked about SK Square’s first investment target, he smiled and refrained from answering.

The surviving company SK Telecom will also expand ultra-collaboration with global companies including Amazon. The partnership for the newly launched subscription service ‘T Universe’ in the second half of the year will also extend to global companies. Cooperation plans with Apple TV Plus are expected to be announced within the year.

Meanwhile, at the extraordinary shareholders’ meeting, a stock split was also approved through amendments to the articles of incorporation. Currently, one common share with a face value of 500 won will be split into five shares with a face value of 100 won each. Along with this, SK Telecom appointed Kyu-nam Choi, head of the Future Business Team at SK SUPEX Council, as an outside director.

SK Telecom stated, “He is a person with abundant experience and expertise in strategy and business development for discovering and nurturing new businesses,” and added, “We believe he will contribute to enhancing the company’s value by providing advice and integrated strategies for SK Telecom’s sustainable growth and discovery of new business opportunities.”

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