WionDrive News Desk 
SK Group, South Korea’s second-largest conglomerate, is preparing for a significant strategic review of its operations. The group plans to hold a two-day strategy meeting starting Friday to discuss streamlining its business portfolio and focusing on key areas such as artificial intelligence, semiconductors, and batteries.
The conglomerate, best known for its chip manufacturer SK Hynix, has experienced substantial growth over the past decade, leading to a complex and potentially unwieldy corporate structure. Its electric vehicle battery unit has incurred significant losses, prompting a reassessment of the group’s overall strategy.
As of May, SK Group encompassed 219 companies, making it the largest among South Korea’s 88 business groups in terms of the number of affiliates. This expansive structure contrasts sharply with other major conglomerates like Samsung Group and Hyundai Motor Group, which have 63 and 70 firms respectively.
The need for restructuring became more apparent following the departure of four senior executives late last year and the substantial losses suffered by SK Hynix, the group’s primary revenue generator. These factors have put strain on the conglomerate’s finances and highlighted the need for a strategic overhaul.
The upcoming meeting will involve executives from the parent company and affiliate firms. They are expected to explore various options, including mergers and divestments, to optimize the group’s structure and operations. An SK Group spokesperson described this review as a “routine management activity” aimed at enhancing the conglomerate’s ability to respond to changing business environments and geopolitical issues.
One area of particular concern is the battery business. SK Innovation, which owns both the country’s largest oil refiner and battery maker SK On, is reportedly considering a merger with its profitable gas affiliate SK E&S. This move could help support SK On, which has struggled financially since its split from SK Innovation in late 2021, accumulating operating losses of about 2.3 trillion won (USD 1.7 billion) and maintaining a high debt-to-equity ratio of 188 per cent as of the end of March.
Despite these challenges, SK Group continues to view batteries as a long-term growth area. The conglomerate is looking to reduce investments in other units to better support SK On’s development and eventual profitability.
Other potential restructuring moves include the merger of builder SK EcoPlant with SK Materials’ industrial gas unit, as reported by the Korea Economic Daily. However, both companies have stated they are not aware of such discussions.
SK Group has already begun divesting some assets. SK Networks, which sells smartphones and manages hotels, recently announced the sale of its car rental unit to private equity firm Affinity Equity Partners for 820 billion won (USD 590 million). Additionally, the group is in talks to sell its 9 per cent stake in Vietnam’s Masan Group back to the retail-to-telecoms conglomerate.
These strategic moves reflect SK Group’s efforts to streamline its operations, focus on core growth areas, and improve its overall financial health in response to changing market conditions and internal challenges.
