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Joint Ventures

SK Group to sell stake in petrochemical arm; seeks global partnership

By Feb 23, 2021 (Gmt+09:00)

SK Group to sell stake in petrochemical arm; seeks global partnership

South Korea’s third-largest conglomerate SK Group is eyeing a joint venture with a global petrochemical firm as part of the group’s strategy to scale back on traditional petrochemical assets while increasing investments in eco-friendly sectors.

SK Innovation Co. has hired JP Morgan as the sale advisor to establish a joint venture for the group’s petrochemical arm, SK Global Chemical Co, according to the investment banking industry on Feb. 22. The group is seeking to sell up to a 49% stake and has reached out to a few global petrochemical firms to make inquiries on a potential JV.

For now, SK Group is expected to hold the management rights for the JV, although it may change depending on the negotiation process.

There are differing views over the price tag, but the sale may fetch billions of dollars. SK Global Chemical reported 450 billion won ($405 million) and 660 billion won in profits in 2018 and 2019, respectively.

SK Global Chemical, alongside SK Energy Co., handles the group’s petrochemical business. The petrochemical company uses naphtha, made by SK Energy, to create aromatic products, which are used as raw materials for various goods.

SK Global Chem is the leading aromatic products maker in Asia, and ranks in the top three globally. The company remains one of the group’s core operations reporting over 10 trillion won in annual revenue.

Another reason for cutting back on the group’s primary operations is due to Chairman Chey Tae-won's deep change initiative, which focuses on the group's move to environmental, social and governance (ESG) management. Chey has promoted fostering the electric vehicle battery and the lithium-ion battery separator business while reducing assets and sales portions for traditional oil and chemical operations.

Industry watchers say that SK Innovation Chief Executive Kim Jun is expected to publicly align with the company's shift in business portfolio once the group's legal dispute with LG Chem concludes and the stake sale becomes more concrete.

“SK Innovation already considered a stake sale in 2016 but it was scrapped during internal discussions," said an investment banking industry official. “But this time around, it’s likely to go through as it's part of the group’s overall restructuring,” the official said.

Write to Jun-cho Cha at

Danbee Lee edited this article.

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