[SK, Crisis as Opportunity] M&A Instinct... 10 Deals and 3 Trillion Won Bet in the First Half

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 Oh Hyung-gil] Despite concerns over economic sluggishness, SK has been the most aggressive in mergers and acquisitions (M&A). In the first half of the year alone, it spent over 3 trillion won on 10 M&A deals, investing the most money among domestic corporate groups.

This clearly demonstrated the M&A instinct aimed at maximizing corporate value as part of the 'Financial Story' management emphasized by SK Group Chairman Chey Tae-won.

On the 17th, CEO Score, a corporate data research institute, surveyed the M&A status of 353 companies that submitted semi-annual reports in 2022 among the top 500 domestic companies, revealing that 87 M&A deals were made in the first half of this year. The total investment amount was recorded at 15.0357 trillion won.

Among them, SK Group invested a total of 3.1004 trillion won in 10 M&A deals.

First, SK Ecoplant, which invested the largest amount in M&A on a corporate basis, acquired four companies. The investment amount reached 2.0598 trillion won.

SK Ecoplant acquired TES, a Singaporean electric and electronic waste disposal company, for 1.3699 trillion won, followed by successful acquisitions of Samkang M&T (342.6 billion won), Clenco (215.1 billion won), and J.A. Green (132.2 billion won). Except for Samkang M&T, the other three companies are all waste disposal firms, highlighting how much SK Ecoplant is focusing on waste disposal as a future growth engine.

Additionally, SK Hynix invested 575.8 billion won, and SK Inc. invested 453.5 billion won in M&A.

This proactive M&A push decisively contributed to SK Group rising to second place in the business world rankings.

According to the Fair Trade Commission, SK Group's assets increased by 52.439 trillion won from the previous year to 291.969 trillion won. It has been 16 years since it overtook LG Group in 2006 to rise to third place. At that time, total assets were 54.808 trillion won, which has grown more than fivefold, and the number of affiliates, which was 56, has more than tripled.

Despite the group's growth momentum, Chairman Chey has been urging group affiliates to maximize corporate value and pursue bold management.

At the '2022 Expanded Management Meeting' held on June 17, Chairman Chey said, "The current Financial Story being created and executed lacked linkage to corporate value," and added, "Going forward, we must reorganize the Financial Story based on a corporate value analysis model and promote an upgrade to a new management system based on corporate value."

He continued, "Analyzing corporate value limited to the current business model or area can lead to stagnation. To increase corporate value, we must engage in bold management activities such as finding benchmarks or targets to follow, or escaping the current business model."

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