SKT to Split into Two Companies to Lift Enterprise and Shareholder Value
SK Telecom (NYSE: SKM, hereinafter referred to as “SKT”) today announced its plans for a horizontal spin-off aimed at increasing enterprise and shareholder value. Through the spin-off, SKT will split into two companies: the surviving company (tentatively named “AI & Digital Infra Company”) and the spin-off company (tentatively named “ICT Investment Company”).
The company expects the spin-off to create an opportunity for the telecommunications, semiconductor and New ICT businesses to be properly valued in the market to deliver greater value to shareholders. The surviving company and the spin-off company will each build a management structure fit for the business to facilitate future growth and provide investors with two separate investment options.
Since its establishment in 1984, SKT has been leading innovations in the field of ICT including telecommunications, semiconductor, artificial intelligence (AI), security, commerce and mobility.
SKT has been sustaining its 5G market leadership with a 46.5% market share by attracting 6.35 million 5G subscribers as of February 2021. With over KRW 100 trillion of market cap, SKT’s subsidiary SK Hynix is the second largest stock on the KOSPI by market cap (as of April 13, 2021).
Moreover, SKT’s New ICT businesses – i.e. media, security and commerce - have grown rapidly, taking up 24% of SKT’s total operating income in 2020. SKT is actively promoting initial public offerings (IPOs) of its subsidiaries including One Store and ADT Caps.
The surviving company will strengthen its position as the leading telecommunications company with AI technology at its core. It will have subsidiaries including SK Broadband, the second largest broadband service provider in Korea.
Based on a stable cash flow, the surviving company will continue to create new revenue streams in 5G, while investing in new and innovative technologies to boost the development of the ICT industry. In particular, it will expand digital business areas such as cloud, data center and sub_scription-based services.
The spin-off company will actively carry out diverse investment activities. It plans to invest in both domestic and overseas semiconductor companies to accelerate the growth of the semiconductor industry. In the past, SK Hynix has acquired Kioxia Corporation (formerly Toshiba Memory Corporation) and Intel’s NAND business. Through the spin-off, the company’s investment activities will be proceeded in a swifter manner.
Furthermore, the spin-off company will promote IPOs of its subsidiaries to create a virtuous cycle where increased enterprise value leads to greater investments and customer benefits. Its subsidiaries including ADT Caps, 11st and T Map Mobility will aim to become life platform companies that offer services designed to enhance customers’ convenience in daily lives.
SKT also stated that it has no plans to merge the spin-off company with SK Inc.
SKT plans to complete the spin-off within this year after going through necessary procedures including decision by board of directors and general meeting of shareholders. Prior to the spin-off, the company will seek many opportunities to closely communicate with its shareholders.
( Press Release Image: https://photos.webwire.com/prmedia/5/272740/272740-1.jpg )
WebWireID272740
This news content was configured by WebWire editorial staff. Linking is permitted.
News Release Distribution and Press Release Distribution Services Provided by WebWire.