EBay to Sell 80% of Korean Business to E-Mart for $3 Billion

Sohee Kim and Spencer Soper, Bloomberg News

(Bloomberg) -- EBay Inc. will sell just over 80% of its South Korean online marketplace to local retailer E-Mart Inc. for 3.44 trillion won ($3 billion), the latest in a series of asset sales aimed at overhauling the U.S. e-commerce company.

E-Mart said in a statement it’s agreed to acquire a business that yields more than a 10th of EBay’s global revenue. The unit of retail giant Shinsegae Group has been in talks with banks to line up a multi-tenor loan of about 3 trillion won to support its acquisition, people familiar matter said last week. E-Mart now plans to invest more than 1 trillion won in fulfillment centers over the next four years, which will -- together with its offline stores -- be used to deliver goods as part of its cooperation with EBay in areas from grocery to general merchandise.

“This deal brings together two strong ecommerce and retail companies that can unlock tremendous potential in Korea and provide more choice for customers,” EBay Chief Executive Officer Jamie Iannone said in the joint statement.

The deal is expected to close by late this year or early next year after receiving a foreign exchange transaction approval from Bank of Korea. It could reshape an arena where e-commerce transactions grew 19.5% to 161.4 trillion won in 2020, according to estimates by brokerage eBEST Investment & Securities. Naver Corp.’s commerce business handled transactions of 26.8 trillion won last year, while Coupang Inc. had 21 trillion won. Ebay Korea, which commands a 12% share of the market, came in third with 20 trillion won.

EBay enjoyed a boost during the pandemic as shoppers flocked online, but it continued to grow at a slower pace than rivals including Amazon.com Inc. Iannone, who took the helm in April 2020, is trying to show that a slimmed-down EBay can lure customers and get them to spend more on the site.

EBay split from PayPal Holdings Inc. in 2015 following criticism from activist investors that the faster-growing payments business would be more valuable separated from the online marketplace.

The e-commerce company has been divesting pieces of itself. Last year, it sold event-tickets marketplace StubHub to Viagogo for $4.05 billion. It also agreed to sell its classifieds business to Norway’s Adevinta ASA in a cash-and-stock deal worth $9.2 billion that leaves EBay with a 44.4% stake in the company.

(Updates with details on plans and financing from the second paragraph)