South Korean retail giant Shinsegae acquires eBay Korea for $3.9 billion

The sensational eBay Korea acquisition war has finally come to an end, with South Korean retail giant Shinsegae becoming the ultimate winner.

According to the Korea Times, the headquarters of the US e-commerce giant eBay has selected Shinsegae Group as the new owner of eBay Korea.

An executive at a Korean investment bank said : " eBay headquarters' board of directors has approved the deal . Unlike traditional acquisition deals, eBay headquarters skipped the process of designating a preferred bidder in the sale of eBay Korea, which means eBay headquarters directly notified Shinsegae Group of its board-approved decision. "

Naver founder and chief investment officer Lee Hae-jin ( left ) and Shinsegae Group vice chairman and CEO Chung Young-jin (right)

As for the acquisition price, Shinsegae Group's price was lower than eBay's expectations. It is said that Shinsegae Group proposed about 4.4 trillion won (about 3.9 billion US dollars), which is far lower than eBay headquarters' expectation of 5 trillion won.

It is reported that the acquisition will be jointly acquired by E-Mart and Naver under Shinsegae , and Naver will provide financial support for Shinsegae's acquisition of eBay Korea. Once the acquisition is completed, Shinsegae will become the largest shareholder of eBay Korea, followed by Naver.

Founded in 2000, eBay Korea has grown rapidly and achieved an operating profit of approximately US$75 million last year. eBay Korea's sales account for approximately 11% of eBay's global sales.

However, in the past few years, eBay Korea has seen strong competitors emerge in the Korean e-commerce market, so activist investors such as Elliott Management have put pressure on eBay to sell eBay Korea in exchange for dividends.

According to data from South Korea's Ministry of Trade, the country's total e-commerce monetary transaction volume increased by 25% last year . eBay Korea's total transaction volume last year reached 20 trillion won, second only to Naver (27 trillion won) and Coupang (22 trillion won), with a market share of approximately 12.8%, Coupang accounting for 13% and Naver accounting for 18%.

Shinsegae's acquisition of eBay Korea is bound to bring major changes to South Korea's rapidly growing e-commerce industry, pushing one of the top physical retailers to become South Korea's leading online e-commerce company, and even has the potential to surpass Coupang to become South Korea's most powerful e-commerce company.

Similarly, Shinsegae's acquisition of eBay Korea will put another Korean retail giant, Lotte, in trouble. Lotte originally planned to acquire eBay Korea to rebuild its dying online business when its own online platform Lotte ON failed to make good progress. Shinsegae's cooperation with Naver also cast a thick shadow on the future of Lotte Group's e-commerce path.

South Korea

eBay

Acquisition