Amazon.com, the world's largest online retailer, is in negotiations with South Korea's SK Telecom Co. to invest in the mobile carrier's non-telecom operations to be hived off next month, SK Telecom's Chief Executive Park Jung-ho said on Tuesday.
At an extraordinary general meeting where the vast majority of SK Telecom's shareholders approved its split-off between telecom and non-telecom businesses, Park said that Amazon is considering buying a stake in SK Square, the unit of non-telecom operations, as a strategic investor. He did not elaborate further.
Amazon recently joined hands with SK Telecom’s e-commerce platform 11Street to launch its shopping service, the Amazon Global Store, in the Korean language for Korean customers. Amazon Global Store posted a stellar performance in South Korea, since its launch in the country at the end of August of this year.
11Street is one of the 15 companies to belong to SK Square, along with an internet services provider SK Broadband Inc., a security service firm ADT Caps Co., One Store, an over-the-top service Wavve and T Map Mobility. Some of them plan to go public, though their IPO plans have not been specified yet.
The entity of non-telecom businesses, which make up 40% of SK Telecom, will kick off on Nov. 1 and be listed on Korea Exchange on Nov. 29. It will serve as an investment firm of the SK Group and the single largest shareholder in SK Hynix Inc. with a 20% stake. The memory chipmaker is the second-largest stock on Kospi, with a market cap of 67 trillion won.
SK Telecom expects the corporate value of the spun-off unit to treble to 75 trillion won ($63 billion) within the next four years, versus 26 trillion won at the end of March of this year.
"Soon after the split-off, both companies will write success stories, based on their clear business identity of telecom and investment, respectively," SK Telecom CEO Park told the shareholder meeting.
Park, concurrently CEO of SK Hynix, will head SK Square as well.
SK Telecom’s surviving entity will focus on artificial intelligence (AI) and digital infrastructure, in addition to its current mobile and network businesses. It will also expand into a number of new areas such as cloud, data center and AI-based subscription segments, led by Ryu Young-sang, SK Telecom's mobile network operations head.
FIVE-FOR-ONE STOCK SPLIT
At the shareholder meeting, SK Telecom also put to vote a five-for-one stock split plan, which got the nod from 99.96% of the attendants, including South Korea's National Pension Service, the world's third-largest pension scheme.
Under the plan, a shareholder of one SK Telecom share will receive five shares, which will lower its face value.
The company expects the stock split will make its shares more accessible by individual investors and help lift the corporate value of both entities.
SK Group will undergo a major governance reform with significant empowerment of the board of directors in making key management decisions. The group said on Oct. 11 that the board members of its holding company SK Inc. and the affiliates will have strengthened authority over the chief executiv
SK Telecom CEO Park Jung-ho explains the company spin-off (Courtesy of SK Telecom) South Korea’s largest mobile carrier SK Telecom Co. will split into two separate entities. SK Telecom said on Apr. 14 that it will create a new entity, through a spin-off method, which maintains the current
SK Group Chairman Chey Tae-won speaks during a CEO seminar of group units in October 2020. Last month, South Korea's third-largest conglomerate SK Group agreed to sell its 21-year-old baseball club SK Wyverns to the country’s leading retailer Shinsegae Group for 100 billion won ($88 milli