Alongside Coupang’s imminent debut on the US stock market, the local e-commerce market is in for another major event -- the sale of eBay’s Korean unit which operates one of the biggest online marketplaces here, Gmarket.
According to industry sources on Thursday, major local retail giants and IT firms may be considering participating in the race to acquire eBay Korea.
Morgan Stanley and Goldman Sachs, the two advisory firms for the auction, have sent information memorandums, or IM, to about 10 prospective buyers ahead of a planned preliminary bidding on March 16.
The companies who requested for an IM include private equity firms MBK Partners and KKR & Co. and local retail-focused conglomerates Lotte Group and Shinsegae Group. IT giant Kakao has also reportedly received an IM.
The San Jose, California-based parent firm has made official of its intent to sell the Korean unit in January. Local reports say it is asking for a price of about 5 trillion won ($4.4 billion) for the asset.
eBay Korea operates major e-commerce platforms here, including Gmarket, Auction and G9, which take up 12 to 14 percent of market share when combined, according to Statistics Korea data in 2019.
Considering the price tag, big conglomerates with funding capability will likely have an upper hand in the race, local deal watchers said.
The sale comes as the local e-commerce sector is expected to undergo a major shake-up amid the pandemic.
Traditional retail giants Shinsegae and Lotte, having built their portfolio around department store chains, have been seeking opportunities to bolster their presence online. Shinsegae and Lotte have SSG.com and Lotteon as their respective online platforms.
MBK Partners, which is the major shareholder for Homeplus, a hypermarket chain, also appears to be on the same page with the retail conglomerates. Homeplus recorded below 1 trillion won in online sales in 2020, falling far behind its rivals.
Kakao, which operates leading messenger app Kakao Talk and search engine Daum, also appears to be a prominent candidate that can afford the acquisition cost.
In a report, Hyundai Motor Securities said that if Kakao does acquire eBay Korea, it would become a “threatening rival” to Naver and Coupang, which lead the e-commerce sector here.
“Kakao has had a net cash of about 3 trillion won in the end of last year, and adding the value of about 2.8 percent of its stocks (worth 1.2 trillion won), it appears to be financially capable of acquiring eBay Korea,” Kim Hyun-yong, an analyst from Hyundai Motor Securities said in a report.
If Kakao acquires eBay Korea, it would achieve an annual transaction of about 25 trillion won, which just exceeds that of Coupang’s. The move would put it in a position to compete with Naver and it would certainly cause a stir in the industry, Kim added.
By Jo He-rim (firstname.lastname@example.org