KKR is set to acquire the waste and water treatment arms of South Korea’s SK Ecoplant in a $1.2bn transaction, as the SK Group affiliate pivots towards semiconductors and IT recycling, according to KED Global.

The deal includes SK Ecoplant’s full stake in waste management company Renewon and a 75% interest in water treatment firm Renewus. While SK originally aimed to raise 2.5 trillion won through the sale, it ultimately settled for a valuation in the mid-1 trillion won range, with KKR submitting the highest bid after rival STIC Investments exited the process.

This acquisition underscores KKR’s continued focus on South Korea’s fragmented environmental sector. The deal was led by Kim Yang-han, a partner in charge of KKR’s infrastructure investments across Asia-Pacific. He previously oversaw the firm’s 2.4 trillion won investment in SK E&S and the creation of Ecorbit, which was later sold for approximately 2 trillion won.

The divestment follows SK Ecoplant’s 2020 acquisition of EMC Holdings, now Renewus, for 1.5 trillion won, and subsequent purchases of local landfill and incineration firms for 825.6bn won, merged under Renewon. However, the environmental business failed to generate expected synergies and became a financial burden, posting net losses of 30.5bn won (Renewus) and 98.9bn won (Renewon) in 2024.

SK Ecoplant will now shift its focus to its Hi-tech division, centred on semiconductor infrastructure and IT asset disposition services. It aims to strengthen its position in areas aligned with growing demand from AI-related data centres. Key assets include SK Tes, acquired in 2022, and memory chipmaker Essencore.

The company is also reviewing the sale of its 37.6% stake in offshore wind subsidiary SK Oceanplant and plans to spin off gas and carbon capture assets. These moves are part of its broader strategy ahead of a planned IPO in 2026.

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