Merger involving SK Group’s corporate restructuring

This transaction, involving SK Group’s corporate restructuring, is composed of three mergers with the first being a merger between SK On Co., Ltd. (“SK On”) and SK Enterm Co., Ltd. (“SK Enterm”), with SK On as the surviving company and SK Enterm as the dissolving company. The second merger is between SK On and SK Trading International Co., Ltd. (“SK Trading International”), with SK On as the surviving company and SK Trading International as the dissolving company, followed by the last merger between SK Innovation Co., Ltd. (“SK Innovation”) and SK E&S Co., Ltd. (“SK E&S”), with SK Innovation as the surviving company and SK E&S as the dissolving company. 

This transaction attracted significant market attention due to the following factors: (i) it was part of a restructuring within SK Group, one of the largest conglomerates in South Korea, (ii) the combined net asset value of the merging companies amounted to approximately KRW 25 trillion, making it one of the most notable M&A deals in the country this year by scale, and (iii) some of the merging companies had FI shareholders, making negotiations and securing consent from these shareholders a critical element of the transaction. 

Through this transaction, SK Innovation absorbed SK E&S, the largest private LNG company in Korea, making itself into a major energy corporation with KRW 100 trillion in assets and KRW 88 trillion in sales. This positions SK Innovation not only as a leading company in Korea but also as the largest private energy company in the Asia-Pacific region. SK On’s merger with SK Trading International, the only company in Korea specializing in crude oil and petroleum product trading, and SK Enterm, the largest commercial tank terminal company in Korea, allowed the company to enhance its competitiveness in raw material sourcing. As a result, through this transaction, each company has significantly strengthened its capabilities to lead the energy and raw materials industries in Korea.

Lee & Ko provided comprehensive legal advice regarding the drafting of the merger agreement, negotiating and concluding agreements with financial investors (FIs) and other stakeholders, and advising on various contracts related to the transaction. Lee & Ko also reviewed the transaction structure, overall schedule of the transaction, legal issues related to procedures such as board of directors’ meetings, shareholders’ meetings, public disclosures, holding company regulations, and merger filings. With Lee & Ko’s prompt legal advice, the signing of the transaction was completed successfully, and the firm will continue to provide effective legal counsel until the successful completion of the transaction.