Due to the Acquisition of eBay Korea... Possible Scenarios for Yogiyo's Main Bid

eBay Korea Acquisition Battle: Preferred Negotiator to Be Announced Tomorrow
Merger Schedule Overlaps, Making Yogiyo's Final Bid Calculations Complex

[Asia Economy Reporter Jo In-kyung] With the main bid for the sale of Yogiyo, the second-largest domestic delivery app, just three days away, the direction of the Yogiyo acquisition battle is expected to vary greatly depending on who is selected as the preferred negotiation partner to acquire eBay Korea. As the schedules of two major mergers and acquisitions (M&A) involving large retail companies overlap, the calculations of acquisition candidates aiming to make the best choice regarding large-scale capital investment to dominate the e-commerce market and the expansion of last mile (the final stage of delivering products to consumers) linked services are becoming increasingly complex.

Complex Calculations Surrounding eBay Korea and Yogiyo

According to the distribution industry on the 14th, attention is focused on who will be selected as the preferred negotiation partner for the sale of eBay Korea, which will be announced after the annual board meeting of the U.S. eBay headquarters scheduled for the 15th?Shinsegae Emart or Lotte Shopping. Initially, only these two rival retail companies participated in the main bid for eBay Korea’s sale, which closed on the 7th.

If Shinsegae Emart is selected as the preferred negotiation partner for acquiring eBay Korea, Shinsegae, led by SSG.com, is unlikely to participate in the Yogiyo main bid scheduled for the 17th. This is because acquiring eBay Korea, which is rumored to be worth up to 5 trillion won, along with the 2 trillion won scale of Yogiyo, would impose too heavy a financial burden.

On the other hand, if Lotte Shopping is selected as the preferred negotiation partner for acquiring eBay Korea, Shinsegae is expected to aggressively pursue the acquisition of Yogiyo. Shinsegae had previously stated, "We are reviewing whether there is synergy to be gained by linking distribution and last mile through Yogiyo." Similarly, Lotte cannot rule out the possibility of entering the Yogiyo main bid if Shinsegae becomes the preferred negotiation partner for eBay Korea acquisition.

The intentions of MBK Partners, the largest shareholder of Homeplus, are also complicated. Although MBK Partners did not participate in the main bid for eBay Korea, when asked about the reason for their absence, they have taken an ambiguous stance, saying, "We continue to have interest in eBay Korea."

Retail Industry Focuses on Last-Minute Variables

In the retail industry, if Shinsegae SSG.com or MBK Partners acquires Yogiyo, it is expected that Yogiyo will grow into an app that delivers not only food but also products from marts and convenience stores.

Initially, private equity firms such as Affinity Equity Partners, Permira, and Bain Capital were also reported to have shown interest in the preliminary bid for Yogiyo. Since companies that did not participate in the preliminary bid can join the main bid, several last-minute variables remain.

Once the new owner of Yogiyo is decided in the already saturated domestic delivery app market, competition among companies is expected to intensify further. Currently, Yogiyo ranks second in the delivery app market following Baedal Minjok, while the latecomer Coupang Eats is rapidly growing and closely chasing Yogiyo.

According to market research firm Nielsen Korean Click, Yogiyo’s monthly unique users decreased from 7.31 million in September 2019 to 6.6 million last September, whereas during the same period, Coupang Eats’ users increased from 340,000 to 1.5 million.