"Who Will eBay Korea Belong To?"... Different Intentions, Outline Tomorrow

Pre-Bid D-1 'Mind Games'
Coupang's Large-Scale Fundraising Sparks Industry Concerns
Despite Trillion-Won Prices and Open Market Synergy Limits
eBay Acquisition Means 'Market Share Advantage'... Deep Deliberation
"Deal Outcome Ultimately Decided by Price"

[Asia Economy Reporter Yuri Kim] With the preliminary bidding for the sale of eBay Korea just one day away, intense last-minute jockeying is underway among the leading acquisition candidates. Following Coupang's successful large-scale fundraising through its New York Stock Exchange listing, a fierce competition for survival in the domestic e-commerce industry has become inevitable, leading to a noticeably changed industry perspective on the eBay Korea acquisition battle compared to the initial stages.

◆ Three-way race? Four-way race? Intense jockeying

According to industry sources on the 15th, the preliminary bidding for the sale of eBay Korea scheduled for the 16th is expected to see participation from major retail conglomerates such as Shinsegae Group and Lotte Group, as well as the rising 'IT giant' Kakao, and MBK Partners, a management participation-type private equity fund (PEF) that is the major shareholder of Homeplus. Most of the leading acquisition candidates who have received the investment memorandum (IM) are expected to participate in the preliminary bidding to be shortlisted as qualified bidders and then decide whether to continue in the acquisition through due diligence and other processes.

In the early stages of the acquisition battle, the response from potential bidders was lukewarm. This was due to concerns over the massive capital required for a trillion-won scale deal, fears of the 'winner's curse,' and the business structure of eBay Korea, which is heavily focused on open markets. However, after Coupang's listing on the New York Stock Exchange, which recognized its market value at around 100 trillion won and signaled aggressive investment-based competition, the industry, which requires a comparable 'scale,' has become more alert and busy recalculating their strategies.

◆ Shinsegae moves amid changing atmosphere

The market expects the sale to be completed around 4 trillion won, lower than the 5 trillion won proposed by eBay. Initially, the retail industry drew a line saying it was 'too expensive,' but the atmosphere changed after Coupang's listing. Although still expensive, the stance shifted to 'consideration from a realistic perspective.'

eBay Korea, which operates Gmarket, Auction, and G9, is estimated to have recorded sales of 1.3 trillion won and an operating profit of 85 billion won last year. Its online shopping transaction volume is at a level similar to Coupang's, around 20 trillion won. Whoever acquires eBay Korea will instantly gain a scale capable of challenging the top ranks in the industry.

At present, the most proactive player is Shinsegae Group. Having selected an acquisition advisory firm and begun reviewing the investment memorandum, Shinsegae is expected to undergo a corporate value adjustment verification process through the preliminary bidding. Shinsegae, which had been preparing for the open market entry of its integrated online mall SSG.com, will rapidly expand its scale through the eBay acquisition. Last year, SSG.com's transaction volume was about 3.9 trillion won. Industry insiders also speculate that Shinsegae may partner with Affinity Equity Partners and BlueRun Ventures (BRV). These firms formed a partnership with Shinsegae by investing 700 billion won in SSG.com in 2019 and plan to invest an additional 300 billion won by next year.

◆ Lotte and Kakao movements also variables

Lotte Group is in a position where it must find a way to overcome the sluggish performance of its integrated online mall, Lotte On. Following the resignation last month of Cho Young-je, head of Lotte Shopping's e-commerce division (CEO), who took responsibility for the poor business performance, Lotte Group faces the need for a major rebuilding of Lotte On, making the acquisition of eBay Korea a potential major turning point for Lotte's online business.

Kakao is highly likely to pursue acquisition due to the significant gap with its rival Naver in the online shopping sector. If Kakao's commerce business, currently centered on mobile gift services, expands into the open market, its annual transaction volume could grow to around 25 trillion won, rivaling Naver's 27 trillion won. MBK Partners, which owns Homeplus, is also reportedly considering both solo participation and consortium formation.

An industry insider said, "Coupang was recognized for its high corporate value due to years of exceptional sales growth and market dominance potential, which is different from eBay Korea. Ultimately, each company is concerned about market share, but whether the acquisition succeeds will be determined by the price."

This content was produced with the assistance of AI translation services.