Newly focused on e-commerce a day after turning loose two business units that never really suited its purpose, eBay is moving to become the dominant player in the Korean e-market by acquiring Gmarket, for $1.2 billion in cash.
The deal calls for eBay to pay $24 per share for all outstanding shares of Gmarket—including Yahoo's 10 percent stake—giving eBay a 67 percent interest in the company.
eBay has been in talks to buy a portion of the fashion-oriented retail site for some time and last August it filed for trade agency approval of a possible deal.
With the acquisition, eBay will significantly increase its footprint in Asia. And it's looking to buy more companies in the region—particularly in Japan and Singapore—in the next six to 12 months, according to reports.
More immediately, the deal will set eBay as the foremost provider of retail e-marketplace services in Korea. eBay also is a majority shareholder in Internet Auction Co., Korea's second-largest online marketplace, which focuses on computers, electronics and sports.
eBay says it plans to integrate the two sites, as well as enable Korean sellers to export their products to buyers in foreign countries.
"The combination of Gmarket and IAC … creates strong operational synergies between the two market leaders, offers more opportunities for sellers and enhances our ability to serve complementary consumer segments," says eBay CEO John Donahoe.
Gmarket and IAC hold a combined 81 percent share of the Korean e-market. In order to appease regulators, eBay agreed not to raise its sales commission for the next three years, according to Korean press reports.
Final approval of the deal is expected in the second quarter of this year.
The Gmarket deal comes a day after eBay confirmed it had sold StumbleUpon back to its founders, followed by news that it would divest Skype through an initial public offering next year. In both cases, eBay cited lack of synergy with the business units.
Auctiva staff writers constantly monitor trends and best practices of those selling on eBay and elsewhere online. They attend relevant training seminars and trade shows and regularly discuss the market with PowerSellers and other market experts.
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