SEOUL, March 16 (Korea Bizwire) — South Korea’s top portal operator Naver Corp. and retail giant Shinsegae Group said Tuesday they agreed to a share swap deal valued at 250 billion won (US$221 million) to strengthen their foothold in the highly competitive e-commerce sector.
Under the agreement, Naver will buy 150 billion won worth of stocks in Shinsegae’s discount store chain operator E-Mart Inc. to own 2.96 percent and purchase 100 billion won worth of fashion retailer Shinsegae International Inc. to own 6.85 percent, according to a company regulatory filing.
In return, E-Mart and Shinsegae will purchase 250 billion won worth of Naver shares to hold a combined 0.4 percent.
The two companies warmed ties after Shinsegae Group Vice Chairman Chung Yong-jin and Naver co-founder Lee Hae-jin agreed to collaborate in the e-commerce sector during a meeting in January.
The deal also follows Naver’s share swap agreement worth 600 billion won with logistics giant CJ Group in October last year to boost their competitive edge in the e-commerce and entertainment industries.
The latest agreement comes as competition in South Korea’s online retail sector is set to intensify after local e-commerce giant Coupang Inc.’s successful debut on the New York Stock Exchange last week.
Coupang’s initial public offering, which raised $4.6 billion, was the largest by a foreign company on Wall Street since China’s Alibaba in 2014.
Coupang’s meteoric rise has prompted new and established players in the e-commerce sector to seek after partnerships, mergers and acquisitions and IPOs.
Retail giant Lotte Group and tech companies, like Kakao Corp. and mobile carrier SK Telecom Co., are reportedly considering acquisition of eBay Korea, which has been up for sale since early this year.
Other online retailers are planning to beef up their size through IPOs, including e-commerce grocer Market Kurly and SK Telecom’s online retail unit 11Street Co.
SK Telecom also partnered with global retail giant Amazon.com Inc. last year, allowing the U.S. company the right to acquire a stake in 11Street based on its progress in the local market.