Shinsegae "Will Proceed Solely in eBay Korea Acquisition"... Naver Officially Declares Non-Participation

The headquarters of eBay Korea in Gangnam-gu, Seoul, on the 17th, where Shinsegae Group is reported to acquire eBay Korea. / Photo by Mun Ho-nam munonam@

[Asia Economy Reporter Yuri Kim] Shinsegae Group's Emart will proceed with the acquisition of eBay Korea independently. Naver, which was also considering the acquisition, has officially announced its withdrawal.

On the 22nd, Naver responded to the disclosure inquiry regarding the eBay Korea acquisition by stating, "As part of strengthening business competitiveness, we considered acquiring a portion of eBay Korea's shares, but ultimately decided not to participate in the acquisition process."

Thus, Shinsegae will proceed with the eBay Korea acquisition alone. Shinsegae was previously selected as the preferred negotiator after proposing an acquisition price in the 4 trillion KRW range. Initially, Naver had formed a consortium with Shinsegae and participated in the main bidding for eBay Korea.

However, during negotiations between eBay headquarters and Shinsegae, there were speculations that Naver might withdraw from the acquisition, and Naver's disclosure today officially confirmed its non-participation. This is analyzed to be due to the burdensome acquisition price, doubts about future synergy, and concerns over the Fair Trade Commission's corporate merger review.

Shinsegae stated, "It has been finalized that Naver will not participate in the acquisition process," and added, "The acquisition will continue to be pursued solely by Shinsegae (Emart)." They further explained, "The broad cooperation framework in logistics and commerce established through the business agreement with Naver earlier this year will continue unchanged."

Originally, Naver was to cover about 20% of the acquisition funds, but since its share is not significant, Shinsegae plans to proceed with the acquisition independently. However, whether the acquisition will be for about 80% of the shares (approximately 3.5 trillion KRW) or 100% will be decided after the final negotiations. The signing of the Stock Purchase Agreement (SPA) between eBay and Shinsegae for the acquisition of eBay Korea is expected to take place as early as this week.

This acquisition effort for eBay Korea is being carried out with the full support of Shinsegae Vice Chairman Jung Yong-jin and the active drive of Emart CEO Kang Hee-seok, aiming for completion despite some opinions that it is "expensive." However, it is known that Shinsegae still maintains a cautious stance, believing that the deal should be finalized under more favorable conditions before confirming the acquisition. Shinsegae said, "We are negotiating with determination to complete the acquisition."

Last year, eBay Korea's transaction volume was about 20 trillion KRW, accounting for approximately 12% of the domestic e-commerce market, which is estimated to be 161 trillion KRW in total.