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Shinsegae Acquires Majority Stake in eBay Korea

July 14, 2021 BeautyMatter
July 14, 2021
eBay

Shinsegae Group acquired an 80% stake in eBay Korea in a $3 billion deal, putting the South Korean retail giant into a three-way competition with Naver and Coupang for the country's e-commerce market.

WHO: eBay Korea operates the e-commerce platforms Gmarket, Auction, and G-9, and is the country's third-largest e-commerce firm with a market share of about 12.8 percent in 2020, according to Euromonitor. Launched in 2000, eBay Korea logged $1.15 billion in sales last year and boasts an 11% share of South Korea's online retail market.

WHY: With the deal, traditional retail giant Shinsegae gets a much-needed boost in the Korean e-commerce sector, while eBay Korea gains a powerful backer after years of underperforming.

IN THEIR OWN WORDS: "In the retail industry of the future, only those that are strong online will survive," Shinsegae stressed in materials released with the announcement. "This deal buys us time and opportunities."

After a thorough strategic review and competitive sale process, we are excited to come to an agreement with Emart," said Jamie Iannone, Chief Executive Officer, eBay. "This deal brings together two strong ecommerce and retail companies that can unlock tremendous potential in Korea and provide more choice for customers. We believe this move further optimizes our portfolio and creates value for eBay shareholders.

DETAILS:

  • eBay and Emart reach an agreement for the purchase of eBay's Businesses in Korea.
  • eBay would sell 80.01% interest in its Korean businesses including G-Market, IAC, and G-9 to Emart and retain a 19.99% interest.
  • eBay would receive approximately $3.0 billion gross cash proceeds for the 80.01% interest and would retain a 19.99% stake with an implied value of approximately $0.8 billion.
  • Implied value for the whole Korean business is approximately $3.8 billion.
  • eBay to retain its stake of approximately 4% of Kakao Bank.
  • During fiscal year 2020, eBay's off-platform businesses in Korea contributed over $14 billion in GMV, and approximately $1.4 billion in revenue, with operating margins in the mid- to high-single-digit range.
  • Goldman Sachs & Co. LLC and Morgan Stanley & Co. LLC are acting as financial advisors to eBay. Wachtell, Lipton, Rosen & Katz and Kim & Chang are acting as legal advisors to eBay.
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