SK On and SK Earthon split off from SK Innovation

SK On, a battery company, and SK Earthon, a petroleum exploration company, were split off from SK Innovation on Oct. 1

SK On logo [SK INNOVATION]

SK Earthon logo [SK INNOVATION]

SK On, a battery company, and SK Earthon, a petroleum exploration company, were split off from SK Innovation on Oct. 1.

The two new companies will be 100 percent owned by SK Innovation. In a split-off, the parent company holds all the shares. In a spinoff, shares are distributed to shareholders of the parent.

“Today marks an important step for SK Innovation to consummate a structural form of a portfolio innovation that we have sought,” said Kim Jun, CEO of SK Innovation in a release Friday.

“We are starting a new chapter.”

Jee Dong-seob, previously head of SK Innovation’s battery business, has been appointed as the CEO of SK On. Jee, who joined SK Innovation in December 2019, has also worked for SK Telecom and SK Lubricants.

“SK On is going to make the safest, fastest and most durable products,” Jee said. “In order to achieve that, SK On is going to build an independent management system and fortify expertise and global competitiveness in the battery business.”

Through partnerships and aggressive investment, SK On, which supplies its batteries to Ford and Hyundai Motor, is expected to achieve annual production capacity of more than 500 gigawatt hours (GWh) by 2030.

The company recently decided to invest 5.1 trillion won to build three battery factories in the United States with Ford. Each factory will have production capacity of 43 GWh.

It already is constructing two plants in Georgia that have combined production capacity of 21.5 GWh.

“Through the latest split-off, SK On plans to become a leading player in the global battery business by 2030,” SK On said in a release.

“The company has already received orders of more than 1,000 GWh.”

Aside from supplying batteries for electric vehicles (EVs), SK On said it will also delve into various businesses utilizing batteries, such as energy storage systems, flying cars and robots.

An initial public offering (IPO) for SK On will happen in the future but not any time soon.

SK Innovation CEO Kim said last month that it will not happen before 2022.

“We have a lot to show in our battery business, but it takes time,” Kim had told to reporters. “We want to prove that our plans and pledges have actually been done and give confidence to the market that SK Innovation and its battery business will grow in a certain way.”

SK Earthon has appointed Myeong Seong as its CEO Friday.

“As an independent corporation, we will start to establish a structure that ensures fast and effective decision-making and the realization of various growth options based on expertise,” Myeong said.

“SK Earthon will identify and develop a green business portfolio as a new growth axis and definitely crown it with success to achieve sustainable growth.”

BY JIN EUN-SOO [jin.eunsoo@joongang.co.kr]