SEOUL, June 16 (Korea Bizwire) — A South Korean conglomerate Shinsegae-led consortium has been picked as the preferred bidder for eBay Korea, the South Korean unit of e-commerce giant eBay, beating its local rival Lotte Shopping and heralding a seismic change in the country’s e-commerce sector, industry sources said Wednesday.
The Shinsegae-Naver consortium reportedly offered some mid-4 trillion won (US$4 billion) to take over the Korean unit of the second-largest e-commerce player in the United States.
Naver, the country’s top internet portal operator, will fund 20 percent of the bidding price, according to the sources.
The announcement came after eBay’s board members discussed the issue in the United States.
Shinsegae and eBay Korea will continue negotiating the details of the deal, which will mark the largest merger and acquisition here in the second half of the year.
E-Mart, the country’s largest discount chain affiliated with Shinsegae, said it has yet to receive any notice from eBay about the matter.
According to the sources, eBay and the Shinsegae consortium are reportedly working on detailed terms of the deal, including the American e-commerce giant retaining 20 percent in its Korean unit.
Shares in Shinsegae closed at 304,500 won Wednesday, and E-Mart rose 3.42 percent to end at 166,500 won on the Seoul bourse, outperforming the South Korean benchmark index’s 0.62 percent gain.
The Korean unit of eBay runs e-commerce platforms, such as Gmarket and Auction. Its revenue is estimated at 1.3 trillion won in the country, with operating income at 85 billion won.
Shinsegae and Lotte Shopping have competed to buy eBay Korea since the third-largest e-commerce operator was put on the selling block in January this year.
Lotte and Shinsegae’s market shares in the country’s e-commerce sector are estimated at 5 percent and 3 percent, respectively.
The acquisition of eBay Korea is expected to sharply jack up Shinsegae’s presence in the e-commerce industry. EBay Korea takes up about 12 percent of South Korea’s e-commerce market after Naver’s 18 percent and Coupang Inc.’s 13 percent.
Earlier in March, Shinsegae strengthened its business ties with online portal operator and e-commerce behemoth Naver, and signed a 250 billion-won (US$224 million) share swap.