Sunday, 25 July 2021

SK Telecom lines up $5bn spending spree

by Harry Baldock, Total Telecom
Thursday 17 June 21

The company has ambitions of mirroring the success of Japan’s SoftBank by becoming a platform business and investing in tech, especially semiconductors

Last week, SK Telecom’s board made the decision to split the company in two, with the traditional mobile and telco business as one unit, while the second, named SKT Investment Co., would focus on investment, growth and initial public offerings (IPOs). Now, it is revealed that the newly formed SKT Investment Co…

Last week, SK Telecom’s board made the decision to split the company in two, with the traditional mobile and telco business as one unit, while the second, named SKT Investment Co., would focus on investment, growth and initial public offerings (IPOs).

Now, it is revealed that the newly formed SKT Investment Co. will have a budget of around $5 billion for acquisitions over the next three years, with around $2 billion of that set to be generated from IPOs of five SK Telecom subsidiaries.

Subsidiaries that SK Telecom may be looking to take public within a year include Microsoft-backed One Store Co., valued at around $1.3 billion, as well as their security firm ADT Caps Co. Over the next three years, SK Telecom will also be looking to launch IPOs for its streaming service Content Wavve Corp, mobile commerce business 11 Street, and navigation service T-Map Mobility; combined, these three businesses are worth at least a billion dollars. 

When it comes to acquisitions, it seems that SKT Investment Co. will focus primarily on semiconductors, taking advantage of the ongoing supply crisis and their large stake in SK Hynix, one of the world’s largest memory producers. 

Speaking about strategy, SK Telecom’s Executive Vice President Huh Seok-Joon mentioned the new company’s strategic similarities to Japan’s SoftBank.

“SoftBank is selling its semi business. They didn’t succeed in semiconductor, but they succeeded in investing in the platform business especially on the mobility side,” said Huh said. “If you look at us, we are successful in semiconductor and we are successfully entering the platform business.”

Potential targets for acquisition include companies throughout the semiconductor business, from memory to fabrication, suggesting that there was a major appetite for investment in the chip sector in the current global environment. 

“There is a global shortage of semiconductors, so I think there’s a very large opportunity for us. We will definitely make more acquisitions and push for both organic and inorganic growth to become a world leader in the semiconductor business,” said Huh.

 

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