Lotte, Shinsegae submit bids for eBay Korea

South Korean retail giants Shinsegae and Lotte Shopping submitted their bids to take over South Korea's third largest e-commerce retailer, eBay Korea, a deal that will shake up the country's e-commerce retail segment, retail industry sources said Monday.

According to the sources, the two retail behemoths submitted their letters of intent (LOIs) for the Korean unit of eBay. SK Telecom, South Korea's No. 1 mobile carrier, and MBK Partners, private equity firm and largest shareholder of discount store chain Homeplus, reportedly dropped out of the race to purchase eBay Korea, which has been up for sale since last year, sources said.

The Monday bidding marks the second attempt by eBay Korea, with the first having fallen through in mid-May as the company anticipated a higher price.

EBay is the No. 2 e-commerce player in the United States with about 11 percent of its revenue coming from South Korea. Its Korean unit, eBay Korea, takes up about 12 percent of South Korea's e-commerce market after Naver's 18 percent and Coupang Inc.'s 13 percent.

Its revenue is estimated at 1.3 trillion won ($1.17 billion), with operating income at 85 billion won.

Lotte and Shinsegae's market shares in the country's e-commerce sector are estimated at 5 percent and 3 percent, respectively.

The takeover of eBay Korea could reshape the country's online retail segment, according to the sources.

EBay wants at least 5 trillion won for its Korean unit and is expected to announce a preliminary bidder next week. (Yonhap)