Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Nearly 30 years of experience in the Korean/Asian equity research. Major sectors coverage include the following:
- Technology 
- Consumer 
- Special Situations/Deep Value Plays
- Tender Offers/M&As
- Holdcos/Stubs
- Asian Unicorns/Private Companies

Korea/Asia, Events, IPOs

SK Inc/SK Materials Merger: Approval Possibilities & Another Arb Opportunity with SK Inc Futures

Busan City Gas Tender Offer at a Whopping 40% Premium by SK E&S:

SK E&S Makes a Tender Offer For Busan City Gas To Take It Private

SK Telecom's Interim Dividends & The Removal of Foreign Ownership Restriction on SKT Investment?

SK Holdings: Sum-Of-The Parts Valuation Analysis & Key Catalysts

A "Nearly" Pure Arb Opportunity: SK Holdings & SK Materials Stock Swap

Battle Lines Drawn As BABA Builds Out First/Last-Mile Capacity; But Who Will Fund 75+ Bn CNY CapEx?

Event-Driven

<div class="content-highlight">
<h2>Conclusion</h2>
<p>We believe that this merger between SK Inc and SK Materials Holdings is likely to get completed. The long term benefit should be higher for SK Inc as it removes the holdco discount associated with its stake in SK Materials and is able to absorb the company without too much dilution.</p>
<p>In addition, in the next 3-5 years, there will likely be more speculation about an eventual merger between SK Inc and SK Square but that will likely require SK Inc raising its value much higher than current levels. Overall, we continue to have a POSITIVE view of SK Inc. </p>
<p>Both SK Square and SK Inc (post merger with SK Materials), will invest in the various segments of the global semiconductor value chain. SK Inc has mentioned that it plans to focus on investing in four main strategic sectors including new materials, bio, green and digital. <span>As both companies will be involved in investing in the various segments of the global semiconductor sector, there will likely be some overlaps in their investment operations. </span><span>As such, there could be some long-term benefits of merging SK Inc and SK Square. </span></p>
</div>


Conclusion
We believe that this merger between SK Inc and SK Materials Holdings is likely to get completed. The long term benefit should be higher for SK Inc as it removes the holdco discount associated with its stake in SK Materials and is able to absorb the company without too much dilution.
In addition, in the next 3-5 years, there will likely be more speculation about an eventual merger between SK Inc and SK Square but that will likely require SK Inc raising its value much higher than current levels. Overall, we continue to have a POSITIVE view of SK Inc. 
Both SK Square and SK Inc (post merger with SK Materials), will invest in the various segments of the global semiconductor value chain. SK Inc has mentioned that it plans to focus on investing in four main strategic sectors including new materials, bio, green and digital. As both companies will be involved in investing in the various segments of the global semiconductor sector, there will likely be some overlaps in their investment operations. As such, there could be some long-term benefits of merging SK Inc and SK Square. 


Merger of SK Inc & SK Materials Holdings: A Prelude to An Eventual Merger with SK Square?