South Korean retailer E-Mart to buy South Korean company from eBay for $ 3 billion
SEOUL, June 24 (Reuters) – South Korean retailer Shinsegae Group E-Mart Inc (139480.KS) on Thursday announced plans to acquire an 80% stake in South Korean company from eBay Inc (EBAY .O) for 3,400 billion won (3,400 billion won). billion).
With the deal, traditional retail giant Shinsegae gets a much needed boost in Korea’s e-commerce sector, where it lags behind rivals such as No.1 Coupang, while eBay Korea is gaining strong support after years of underperformance, analysts say.
eBay will retain a 20% stake in the Korean company, which has an implied value of around $ 3.8 billion, eBay said in a statement.
The transaction is expected to be finalized by the end of the year or early next year, subject to regulatory approvals.
Naver Corp (035420.KS), which had partnered with E-Mart in the bidding process for eBay’s South Korean business, said earlier this week that it had withdrawn from the acquisition.
EBay Korea, which was South Korea’s largest e-commerce player until 2015, experienced slower transaction growth from 2016 due to heightened competition from Coupang, analysts said.
Although South Korea’s online shopping market growth rate reached 41% between 2018 and 2020, eBay Korea’s estimated transaction growth rate was around 4%, Samsung Securities analysts wrote. in a report last week.
However, the business was still attractive to traditional retail giants including E-Mart from Shinsegae, South Korea’s largest hypermarket chain, which struggled to forge a prominent presence. in online shopping, especially after the onset of COVID-19.
âThe transaction price is lower than what eBay Inc originally wanted,â said Park Eun-kyung, analyst at Samsung Securities.
“But whether the price is competitive or not should be judged in the short term by the improved performance of eBay Korea, as eBay Korea’s recent efforts in direct sourcing and fast shipping can be helped. through the purchasing power and cost control of E-Mart, “she said.
EBay Korea operates the Gmarket, Auction and G9 e-commerce platforms, and is the third-largest e-commerce company in the country with a market share of around 12.8% in 2020, according to Euromonitor.
($ 1 = 1,131,6,800 earned)
Report by Heekyong Yang; edited by Jason Neely
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