Shareholders of SK Holdings and SK C&C on Friday approved the proposed merger between the two companies, paving the way for SK Group, the nation’s third-largest conglomerate, to streamline its business structure and reportedly strengthen the influence of the de facto owner family that includes group chairman Chey Tae-won.
Following the approval, a new entity, named SK Holdings, is set to be launched on Aug. 1. Its asset value is estimated to reach 13.2 trillion won ($12 billion).
“The new holding company will ramp up efforts to meet shareholders’ expectations by achieving 200 trillion won in sales and 10 trillion won in profits by 2020,” said SK Holdings CEO Cho Dae-sik.
The approval was largely expected despite the National Pension Service, the nation’s largest institutional investor with a 7.2 percent stake in SK Holdings, opposing the merger plan claiming that the share swap ratio could hurt shareholders’ interests.
The swap ratio between SK Holdings and SK C&C was set at 0.75:1.
During Friday’s vote, most of shareholders voted in favor of the merger plan except the pension fund and some minority investors.
group chief Chey Tae-won currently holds a 32.9 percent stake in SK C&C, while his stake in SK Holdings stands at only 0.02 percent.
His shareholdings will reduce to 23.2 percent in the new entity, but his influence throughout SK companies is expected to get boosted.
The owner family, including Chey, will hold 30.6 percent of stakes in the new holding company.
Investors have paid keen attention to the NPS’ stance on the SK deal as it holds the casting vote in the proposed merger between Samsung C&T and Cheil Industries.
Samsung Group, the nation’s largest conglomerate, has been engaged in a proxy fight with U.S. activist hedge fund Elliott Associates to win more support from shareholders at an upcoming vote planned on July 17.
By Lee Ji-yoon (jylee@heraldcorp.com)
