The planned merger of two SK Telecom subsidiaries ― SK Planet and SK Marketing & Company ― is seen as SK Group’s first step to streamline its subsidiaries to improve the conglomerate’s efficiency, a report said on Monday.

Yang Jong-in, an analyst at Korea Investment and Securities, said that the merger of the two subsidiaries in the information and telecommunications sector would produce synergy by getting rid of projects that overlap.

As exemplary cases, the two companies will combine projects like location-based online shopping services and upgrade marketing capabilities as well as strengthen platform and ad-related businesses, he said.

“The risk level involving this merger also looks to be low,” he said. “There is a possibility that SKT will try to trade SK Innovation’s 50 percent controlling stake (of SK M&C) with other shares it possesses.”

SK M&C is a marketing joint venture between SKT and SK Innovation, which each has a 50 percent controlling stake. SK Planet, on the other hand, is a wholly-owned subsidiary of SKT that focuses on software and mobile platform-related projects. The firm split from the telecom giant in October of last year.

Yang also said that he expects to see other SK firms like SK Broadband and SK Telink merge in the future.

However, an SKT spokesman said the company was currently looking into such mergers for synergy and efficiency, but it has yet to be confirmed.

The Korea Herald had reported on Nov. 23 that SKT is most likely to merge two of its subsidiaries SK Planet and SK M&C to strengthen its competitiveness in businesses such as mobile.

Industry sources said that the country’s top mobile carrier would move forward with the merger and acquisition plan after it acquired SK Innovation’s 50 percent stake in SK M&C for a 100 percent controlling equity. The two began looking into the merger last September.

“Talks about the merger between SK Planet and our company have been taking place for some time now, but this time it’s different ― it is being discussed on a serious level with our chief executive getting briefed about it last week,” said an official at SK M&C who wished to remain anonymous.

SKT is projected to make SK Planet the surviving entity through a statutory merger with SK M&C, which will dissolve following the M&A process by February of next year, according to industry sources.

By Cho Ji-hyun (sharon@heraldcorp.com)