SK Innovation to absorb subsidiary SK IET to stabilize finances

SK Innovation has decided to absorb its subsidiary, SK IET (SKIET), a manufacturer of lithium-ion battery separators. The merger, which is expected to be finalized on January 1, 2027, aims to strengthen business competitiveness, improve financial stability, and enhance operational efficiency through the integration of R&D and management functions.

The decision comes as SK IET faces significant financial challenges due to a slowdown in the electric vehicle market and increased competition from Chinese manufacturers, which has led to high operating losses and low factory utilization rates. SK Innovation stated that maintaining SK IET as an independent entity posed a risk of spreading financial instability to other group affiliates.

Following the merger, SK Innovation aims to achieve a turnaround in the separator business within two years. The company expects to reduce annual costs by approximately 60 billion won through the elimination of redundant fixed and operating expenses. Additionally, the company plans to diversify its product portfolio by expanding into the energy storage system (ESS) separator market.