Shareholders of SK Materials Co., a semiconductor and display materials arm under SK Group, on Friday approved a plan to merge with its parent company, SK Inc., paving the way for the latter to bolster investment in new growth drivers, including battery materials.

The merger approval, released in a regulatory filing, came about two months after the two companies announced the decision made by the companies' boards for SK Inc., the investment and holding company of South Korea's No. 3 conglomerate, to absorb SK Materials.

SK Inc. is also due to hold a board of directors meeting later in the day to approve the takeover. The merger process will be completed by early next month.

Under the merger plan, SK Materials will be split into two entities -- investment and business, and SK Inc. will absorb the investment unit and turn the business part into its wholly owned subsidiary. Currently, SK Inc. holds a 49.1 percent stake in SK Materials.

SK Materials shareholders will receive 1.58 shares of SK Inc. stock for each SK Materials share they have.

SK Inc. said the restructuring will create synergy by combining its investment expertise and SK Materials' business competence in the semiconductor and battery materials sector, and also promote shareholder value.

SK Materials was created in 2016 after SK Inc. acquired OCI Materials, a local manufacturer of special gases used in chipmaking, LCD and solar panels. Its main industrial gas product is used in the cleaning processes in the manufacturing of semiconductors and display panels.

In recent months, SK Materials has been expanding its portfolio into the battery materials business -- one of SK Inc.'s core investment areas. In July, SK Materials said it was teaming up with a US battery materials producer to build a lithium-ion battery material factory in South Korea.

SK Inc. has unveiled a 5.1 trillion-won ($4.35 billion) investment plan to expand its foothold in the advanced materials sector by 2025, with a focus on semiconductors and battery materials. (Yonhap)