SK Telecom (NYSE: SKM) announced plans to spin off the data center and submarine cable businesses of its wholly owned subsidiary SK Broadband into a new company called SK Horizon, with KKR (NYSE: KKR) and the IMM Investment-Stonebridge consortium committing a combined KRW 3.08 trillion ($2.2 billion) equity investment in the new entity.

Upon completion of the investment, KKR will hold a 29% stake in SK Horizon and the IMM consortium will hold 20%, while SK Telecom will retain a 51% stake and management control. KKR is investing primarily through its Asia Pacific infrastructure strategy.

SK Horizon will be responsible for expanding data center capacity to a total of 318 MW across eight existing facilities and new sites under construction, including locations in Ulsan and Guro. The company will also manage submarine cable infrastructure.

The surviving SK Broadband entity will focus on fixed-line, media, and enterprise businesses. Kim Seong-soo, current CEO of SK Broadband, is expected to concurrently serve as CEO of SK Horizon, pending board approval following the company's establishment.

SK Telecom said it has also established a separate entity, SK Hyper, targeting 5 GW of new data center capacity by 2029 and 15 GW by 2035. SK Telecom will oversee overall strategy across both SK Horizon and SK Hyper.

The spin-off ratio is set at approximately 0.84 for the surviving SK Broadband and 0.16 for SK Horizon, based on net asset book value. The transaction requires shareholder approval and regulatory clearances, with completion targeted for the first quarter of next year.

"This governance restructuring is a proactive measure aimed at strengthening expertise and enabling faster execution in the AIDC business," said Kim Seong-soo, CEO of SK Broadband.