SK Group Weighs Trillion-Won Westinghouse Stake

Headquarters of SK Group located in Seorin-dong, Seoul. (Photo courtesy of SK Group) SK Group is reportedly considering participating in the government-driven acquisition of a stake in the U.S. nuclear power company Westinghouse. The government is reportedly exploring a joint acquisition with domestic companies to reduce the financial burden on the Korea Electric Power Corporation and the Korea Hydro & Nuclear Power, which will be the main acquiring entities. According to relevant ministries and the industry on Oct. 14, SK Group is reportedly reviewing a plan to participate as a major investor in the acquisition of the Westinghouse stake. An SK Group official said in a phone call on the same day, “We are considering participation,” but did not disclose specific plans. The target acquisition stake ratio by the government is 5% to 10%, including voting rights. Under the South Korea-U.S. Nuclear Energy Framework recently agreed upon with the United States, South Korea secured the right to acquire a stake in Westinghouse at a price 10% lower than the public offering price. The investment banking industry estimates that if Westinghouse goes public, its corporate value will reach up to $30 billion. Acquiring a 10% stake is projected to cost $2.7 billion. The government previously proposed participation in the stake acquisition to domestic nuclear power engineering, procurement, and construction companies. It is known that seven to eight companies, including Doosan Enerbility, Samsung C&T, Hyundai E&C, and GS E&C, are reviewing their participation. The plan is to share the burden by attracting private funds, as it is difficult for the Korea Electric Power Corporation and the Korea Hydro & Nuclear Power to shoulder all the acquisition funds. There is a possibility mentioned that SK may participate in the investment through AI Company, an unlisted U.S. subsidiary of SK hynix. AI Company is the group’s dedicated artificial intelligence investment corporate entity, originating from Solidigm, the Intel NAND business division acquired by SK hynix in 2021. SK Group’s push for the Westinghouse investment is analyzed as a strategy to develop the energy sector into a future growth business. SK Group has been expanding the scope of its energy business by investing in the nuclear power business, focusing on small modular reactors. SK Inc. and SK Innovation invested $250 million in the U.S. small modular reactor company TerraPower in August 2022, becoming the second-largest shareholders. In January this year, the Korea Hydro & Nuclear Power also invested in a stake in TerraPower. If the Westinghouse investment is realized, SK’s nuclear power business will expand from next-generation small modular reactors to the design of large nuclear power plants, nuclear fuel supply, and maintenance. SK Group Chairman Chey Tae-won recently stated that stable power supply and the establishment of energy infrastructure are essential for the competitiveness of AI data centers and the semiconductor industry. A business community official said, “Although SK is a company with no direct relationship to nuclear power, it seems to have taken an interest in terms of seeking business opportunities.”