Tracking developments across tech supply chains, Tech Supply Chain Tracker

Tech Supply Chain Tracker

Tracking developments across tech supply chains

Equity Bottom-Up

<ul><li>XPeng and Baidu leading China's autonomous driving technology advancements in 2023</li><li>Malaysia's semiconductor sector set for growth in 3Q24 with talent recruitment and AI integration</li><li>Singtel partners with SK Telecom for 6G and AI innovation, while automakers persist in V2X development efforts</li></ul>

XPeng and Baidu leading China's autonomous driving technology advancements in 2023Malaysia's semiconductor sector set for growth in 3Q24 with talent recruitment and AI integrationSingtel partners with SK Telecom for 6G and AI innovation, while automakers persist in V2X development efforts

Tech Supply Chain Tracker (19-Jul-2024): China's auto exports, 2023.

Korea / Special Sits, Pairs, Index Rebalancing, Clepsydra Capital

Sanghyun Park

Korea / Special Sits, Pairs, Index Rebalancing

Clepsydra Capital

Investigate special situations, pairs, and index rebalancing trades in Korea.

Event-Driven

<ul>
<li>The merger ratio, not as unfavorable to SK Innovation as feared, shows SK Group acting cautiously amid political and regulatory scrutiny.</li>
<li>SK Inc.'s stake will drop to mid-60s; the 1.2x merger ratio for SK E&amp;S could positively affect SK Innovation's stock price short-term.</li>
<li>Persuading KKR is crucial. SK E&amp;S won't convert ₩3T in RCPS or grant appraisal rights, potentially leading KKR to consider litigation, a significant risk to the merger.</li>
</ul>


The merger ratio, not as unfavorable to SK Innovation as feared, shows SK Group acting cautiously amid political and regulatory scrutiny.
SK Inc.'s stake will drop to mid-60s; the 1.2x merger ratio for SK E&amp;S could positively affect SK Innovation's stock price short-term.
Persuading KKR is crucial. SK E&amp;S won't convert ₩3T in RCPS or grant appraisal rights, potentially leading KKR to consider litigation, a significant risk to the merger.


SK Innovation & SK E&S Merger Official Disclosure: Unexpected Merger Ratio

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Douglas Research Advisory

<ul>
<li>SK Innovation (096770 KS) and SK E&amp;S plan to hold a board meeting on 17 July to discuss the potential merger between the two companies.</li>
<li>If this merger is successful, it would create the eighth largest company in Korea with a combined assets of 106 trillion won (US$77 billion). </li>
<li>Although the merger ratio is not yet available, we believe that this potential merger could potentially benefit SK E&amp;S and SK Inc but could be negative on SK Innovation.</li>
</ul>


SK Innovation (096770 KS) and SK E&amp;S plan to hold a board meeting on 17 July to discuss the potential merger between the two companies.
If this merger is successful, it would create the eighth largest company in Korea with a combined assets of 106 trillion won (US$77 billion). 
Although the merger ratio is not yet available, we believe that this potential merger could potentially benefit SK E&amp;S and SK Inc but could be negative on SK Innovation.


SK Innovation and SK E&S to Discuss a Potential Merger on 17 July

<ul>
<li>Interest in this merger is emerging from an unexpected angle, especially regarding the merger ratio's fairness. There's a risk it could unfavorably affect SK Innovation's stock price.</li>
<li>SK Innovation at ₩108,000/share; SK E&amp;S at ₩290,000/share based on strong profits. SK plans ratios around 1.3x total value and 2.7x per share. SK Inc may reach mid-70% stake post-merger.</li>
<li>SK Innovation's stock may face short-term decline. Securing shareholder approval, with SK Inc at 36%, overseas investors 22%, local institutions 15%, local retail 20%, and NPS 7%, poses challenges.</li>
</ul>


Interest in this merger is emerging from an unexpected angle, especially regarding the merger ratio's fairness. There's a risk it could unfavorably affect SK Innovation's stock price.
SK Innovation at ₩108,000/share; SK E&amp;S at ₩290,000/share based on strong profits. SK plans ratios around 1.3x total value and 2.7x per share. SK Inc may reach mid-70% stake post-merger.
SK Innovation's stock may face short-term decline. Securing shareholder approval, with SK Inc at 36%, overseas investors 22%, local institutions 15%, local retail 20%, and NPS 7%, poses challenges.


SK Innovation & SK E&S: Summary of the Controversy Surrounding the Merger Ratio

<ul>
<li>The declining appeal of the separator business prompts SK to seek buyers for SKIET through block deals amid financial pressures. The first deal is anticipated despite recent stock price drops.</li>
<li>SK Ecoplant looks to sell its 37.6% stake in SK Oceanplant. Negotiations stall over the former major shareholder's 20% stake, prompting consideration of a block deal.</li>
<li>SK Bioscience, under SK Discovery, faces possible sale amid SK's bio company reshuffle. SK Chemicals may bring SK Biopharm under its wing to help SK Inc focus on semiconductors/batteries.</li>
</ul>


The declining appeal of the separator business prompts SK to seek buyers for SKIET through block deals amid financial pressures. The first deal is anticipated despite recent stock price drops.
SK Ecoplant looks to sell its 37.6% stake in SK Oceanplant. Negotiations stall over the former major shareholder's 20% stake, prompting consideration of a block deal.
SK Bioscience, under SK Discovery, faces possible sale amid SK's bio company reshuffle. SK Chemicals may bring SK Biopharm under its wing to help SK Inc focus on semiconductors/batteries.


Block Deal Prospects Arising from SK Group's Corporate Reshuffle

South Korea

SK Holdings Co., Ltd. is a holdings company that is engaged in various industries including energy, chemicals, information technology, semiconductors, marketing, and services businesses in South Korea and internationally.

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SK Inc (034730 KS)

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