Seoul: SK On, the wholly owned battery subsidiary of South Korea’s leading refiner SK Innovation Co., announced plans to swap stakes in its joint ventures with a Chinese partner as part of a “portfolio rebalancing” strategy. This strategic move aims to optimize their operational flexibility and responsiveness to market demands in the burgeoning Chinese battery sector.
According to Yonhap News Agency, SK On collaborated with EVE Power Hongkong Co. to establish two electric vehicle battery joint ventures: Huizhou EVE United Energy Co. (EUE) in 2018 and SK On Jiangsu Co. (SKOJ) in 2019. These ventures were formed with the objective of bolstering their presence in the competitive Chinese battery market. SK On currently holds a 49 percent stake in EUE and a 70 percent stake in SKOJ, with EVE Power owning the remaining shares.
Under the new agreement, the companies will exchange their respective stakes, allowing SK On to become the full owner of SKOJ while EVE Power will take complete ownership of EUE. As part of this transaction, SK On will transfer its 49 percent stake in EUE, valued at 475.9 billion won (approximately US$324 million), while EVE Power will transfer its 30 percent stake in SKOJ, valued at 434.7 billion won. The swap is scheduled to be finalized on February 28 next year, with SK On receiving 41.2 billion won from EVE Power to address the valuation difference.
A company official from SK On stated, “The stake swap is intended to allow SK On to operate SKOJ as a wholly owned subsidiary so we can respond more quickly to market conditions and more flexibly address customer demand.” The move is seen as a strategic effort by SK Innovation, a key affiliate of the chip-to-construction conglomerate SK Group, to strengthen its foothold in the rapidly evolving electric vehicle market.