IMM PE to buy SK Innovation's 49% stake in SK Lubricants for $1.34 bn

South Korea’s IMM Private Equity (IMM PE) via its unit IMM Credit Solution will acquire a 49 percent stake in the country’s leading lubricants producer SK Lubricants from SK Innovation for an estimated 1.5 trillion won ($1.34 billion) to seek for growth in the era of mobility shift to electric vehicles and hydrogen cars.

With the investment, IMM PE becomes the second largest shareholder of the world’s leading premium lubricants maker after SK Innovation which would maintain management right with 51 percent.

Shares of SK Innovation finished 0.19 percent higher at 264,500 won in Seoul trading on Thursday.

As a part for its carbon-cut commitment by 2030, SK Group vowed to sell off around 49 percent stake in SK Lubricants and SK Global Chemical wholly owned by SK Innovation.

According to industry sources on Thursday, SK Lubricants is planning to sign a share purchase agreement next week to sell its 49 percent stake to IMM PE for an estimated 1 trillion won. Its board will decide on the related agenda at a meeting due by the end of the month.

Citi Global Market Securities is managing the deal.

SK Lubricants will skip the formality of naming the preferred bidder and directly go to sign a deal as it has talked with various candidate partners to iron out contract details. IMM PE competing with another strong contender Korea Investment Partners was chosen as the final winner.

With new capital ammunitions, SK Lubricants can upgrade its business strategy for new growth amid the fast rise of electric vehicles and hydrogen cars. It started EV lubricants product development in 2010 and began to supply them to global automakers in 2013. Its lube base oil Yubase now boasts the largest 35 percent share in the global lube base oil market.

Lubricants have a bigger role in EVs to control antiwear performance, frictions, efficiency, electric compatibility and insulation, and electric motor and battery pack cooling.

SK Lubricants expect its EV lubricants sales this year would be doubled from last year to reach an amount corresponding to 1.3 million units of EVs.

IMM PE launched own credit fund IMM Credit Solution in September last year for the first time among homegrown PEFs. IMM Credit Solution recently announced a 200 billion won investment in T Map Mobility.

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