A general meeting of shareholders regarding the merger of SK Innovation and its affiliate SK E&S takes place at the SK headquarters in Jongno District, Seoul, Aug. 27. Yonhap

Shareholders of SK Innovation and its energy affiliate SK E&S on Tuesday overwhelmingly approved a proposed merger of the two companies that would create the largest private energy company in the Asia-Pacific region.

The merged entity of SK Innovation and SK E&S will be officially launched on Nov. 1 with combined assets of 100 trillion won ($75.12 billion) and sales of 88 trillion won.

"The formation of the new entity will create the largest private energy company in the Asia-Pacific region," SK Innovation said in a statement, adding that the proposed merger was ratified with an 85.75 percent approval rate from the attending shareholders.

The proposed merger is part of SK Group's restructuring efforts to streamline its affiliates and support its loss-making battery unit, SK On, analysts said.

Park Sang-kyu, chief executive of SK Innovation, said, "We will do our utmost to ensure that this merger, which will serve as a foundation for the company's long-term stability and growth, is carried out smoothly."

"Furthermore, we will actively review and implement various shareholder-friendly policies following the completion of the merger," Park said.

The merger ratio of SK Innovation and SK E&S was set at 1 to 1.1917417.

The National Pension Fund, a major shareholder of SK Innovation, voted against the proposed merger. The fund is the second-largest shareholder of SK Innovation, with a 6.2 percent stake. SK Innovation's biggest shareholder is SK Inc. with a 36 percent stake.

However, SK Innovation said 95 percent of its foreign shareholders, including proxy advisory firms ISS and Glass Lewis, voted for the proposed merger.

SK Innovation said the proposed merger is expected to "enhance the competitiveness of the energy portfolio by integrating SK Innovation's oil and battery businesses with SK E&S' liquefied natural gas (LNG) and renewable energy businesses."

Shares of SK Innovation rose 2.72 percent to 109,400 won at one point in afternoon trading. (Yonhap)