It appears the long journey started early in 2020 to find a buyer for eBay Korea has come to an end somewhat.
Over a week ago, South Korean reports suggested the company was close to selling the unit to a consortium headed by Shinsegae and Naver.
Today, eBay announced it has reached an agreement for the purchase by Emart (Shinsegae Group) of eBay’s businesses in Korea. But there appears to have been a final twist.
Naver does not appear to have a stake in the new agreement as eBay retains the same position in the business unit Naver reportedly would have had in the Shinsegae-Naver Consortium bid.
What may have changed is unclear and eBay never acknowledged the reports from South Korea. Below is the rest of the press release from eBay announcing the sale of eBay Korea.
Execution of the fully negotiated and finalized purchase agreement is contingent upon the Bank of Korea’s acceptance of the filings related to foreign exchange transactions.
The form of the purchase agreement, agreed upon by the parties, is subject to change only by mutual agreement between eBay and Emart.
Pursuant to the transaction, eBay will sell an 80.01% stake in its Korean businesses for 3.44 trillion KRW (or approximately $3.0 billion USD1) of gross cash proceeds.
“After a thorough strategic review and competitive sale process, we are excited to come to an agreement with Emart. 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.”Jamie Iannone, Chief Executive Officer, eBay
Together, eBay Korea and Emart can build a 360-degree ecosystem that will allow full touchpoints with customers in categories ranging from grocery to general merchandise.
Over the next four years, Emart plans to invest more than 1 trillion KRW in fulfillment centers. Offline stores will also be utilized to serve as fulfillment centers, reinforcing Shinsegae Group’s supply chain management system.
This will enhance Emart’s same-day delivery capabilities and improve fulfillment centers’ capacity utilization. For years the team has been working on a pre-emptive, strategic redeployment of its physical property to digital assets in preparation for a rapidly evolving retail environment heightened by technology innovations.
During the fiscal year 2020, eBay’s off-platform businesses in Korea contributed over $14 billion USD in GMV, and approximately $1.4 billion USD in revenue, with operating margins in the mid to high single-digit range.
eBay plans to report these businesses as discontinued operations going forward and will publish restated historical financials prior to the next earnings release.
The transaction is expected to close by the end of the year or early next year, subject to regulatory approvals.
Update 11/15/2021 – eBay Completes Sale of eBay Korea to Emart
eBay today announced it has completed the transfer of 80.01% stake in its Korean businesses for approximately $3.0 billion USD of gross cash proceeds.
“We are pleased to finalize the deal between eBay Korea and Emart, bringing together two strong eCommerce and retail companies that can unlock tremendous potential in Korea. By joining Emart, the eBay Korea business has an enormous opportunity ahead. We believe this deal allows eBay to further focus on growing our core marketplace and will offer additional value for our customers, employees, and shareholders.”Jamie Iannone, Chief Executive Officer, eBay.
The Company will retain a 19.99% interest in the Korean businesses, including G-Market, IAC, and G-9.
eBay remains committed to buying back up to $7 billion worth of shares for this fiscal year.
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