SK Innovation-SKIET Merger Ratio to Remain Unchanged; Additional External Review

[Financial News] SK Innovation has decided to conduct an additional external review of the merger ratio with its subsidiary SK ie technology (SKIET) and retain the existing ratio. Following the Financial Supervisory Service’s request to amend the securities registration statement, the company conducted an additional external review and considered shareholder views, among other steps, and reflected the relevant information in the amended filing.
SK Innovation disclosed that on the 28th it had filed an amended securities registration statement and a report on material events containing these details. Earlier, on the 4th of last month, the FSS had requested revisions to the merger registration statement, saying that important information needed for investment decisions had to be supplemented.
The amended filing adds the results of a review of the merger ratio by Anjin Accounting Corporation, the external appraiser. Using the discounted cash flow (DCF) method, Anjin calculated a fair merger-ratio range based on earnings value of 1 share of SK Innovation to 0.0772331–0.1427296 shares of SKIET. The existing ratio of 1 to 0.1174540, set using the market-price method, falls within that range.
Accordingly, SK Innovation has decided to retain the existing merger ratio. Under the arrangement, SKIET shareholders will receive 0.1174540 new shares of SK Innovation for each share they hold. The merger value per share is 125,862 won for SK Innovation and 14,783 won for SKIET, respectively.
On the 9th of last month, SK Innovation reestablished a special committee comprising six independent directors to independently review the views of ordinary shareholders. The committee subsequently held four meetings to further review opinions raised at shareholder meetings and the terms of the merger transaction.
In particular, at the ninth special committee meeting, held on the 28th of last month, the committee decided to conduct an additional external review of the merger ratio, taking into account the intent of the revised Capital Markets Act. On the same day, the audit committee appointed Anjin Accounting Corporation as the external appraiser, considering potential conflicts of interest with the existing financial advisers and others. SK Innovation explained that although the revised Capital Markets Act will take effect on December 9, this merger is not subject to the mandatory external appraisal requirement because the board resolution approving the merger was passed on August 25.
The company also supplemented its disclosures on shareholder communications. SK Innovation and SKIET each held two shareholder meetings on the 14th and 15th of last month, alongside online broadcasts. The amended filing reflects key questions raised at the meetings about the fairness of the merger ratio and corporate valuation, the timing of the merger, and other matters, as well as the review of shareholder views.
The merger will proceed as an absorption merger in which SK Innovation absorbs SKIET. SK Innovation plans to strengthen the financial stability of its separator business and improve operational efficiency by integrating overlapping functions and taking other measures.
SK Innovation plans to issue 4,481,300 common shares for the merger. The effective date of the merger is January 1, 2027, and the new merger shares are scheduled to be listed on the 18th of the same month. However, the remaining procedures, including approval by SKIET shareholders at a general meeting, must still be completed. If the value of shares for which SKIET shareholders exercise appraisal rights exceeds 350 billion won, the two companies may terminate the merger agreement or change the merger terms.

[email protected] Kim Mi-hee Reporter