Shinsegae-Naver consortium likely winner of eBay Korea takeover bid: report

A consortium of South Korean retail giant Shinsegae Group and internet behemoth Naver is expected to win a bid to take over eBay Korea, local media reported Wednesday.

If materialized, the deal would set off a major shake-up in the country’s e-commerce retail segment.

No official announcement had been made as of Wednesday afternoon.

In a regulatory filing Wednesday afternoon, E-mart, Shinsegae Group’s retail affiliate, said it was participating in the tender and in discussions with eBay, but nothing has been confirmed on its status.

“We have not yet been told we are the preferred bidder from eBay,” an E-mart official told The Korea Herald. E-mart will make an announcement when a decision is made, the official added.

Multiple local media outlets reported earlier in the day that the US-based global e-commerce platform had chosen E-mart as the preferred bidder for its sale of the Korean unit in a board meeting the day before, quoting unnamed sources.

For E-mart’s bid, Shinsegae Group has formed a consortium with Naver, which runs the country’s largest search portal. E-mart and Naver reportedly had offered to pay around 4 trillion won ($3.58 billion) in the eBay Korea auction. Rival bidder Lotte Shopping is said to have put up about 3.5 trillion won. Both offers fall short of the 5 trillion won eBay had hoped to fetch from the sale.

The reports said Naver would take 20 percent of eBay Korea’s shares, paying about 800 billion won to 1 trillion won.

Although Shinsegae Group already has a strong portfolio of brick-and-mortar retail businesses encompassing department stores and supermarket chains, it has struggled to increase its presence online. Shinsegae’s online retail channel SSG.com was launched in December 2018.

With the acquisition, Shinsegae would rise to the No. 1 position in terms of market share, when combining its online transaction volume with eBay and Naver.

EBay Korea operates some of the country’s major online shopping platforms, including Gmarket, Auction and G9, accounting for nearly 12 percent of market share by transaction volume.

This placed eBay Korea as the third largest e-commerce retail platform last year, after Naver and Coupang, which took about 18 percent and 13 percent of the market share, respectively, according to Statistics Korea.

Shinsegae’s SSG.com recorded a share of 3 percent, falling behind longtime rival Lotte Shopping, which operates Lotte On as its online shopping arm. Lotte On’s transaction volume accounted for 5 percent in the market last year.

In 2020, eBay Korea recorded revenue of 1.3 trillion won and an operating profit of 85 billion won.

After the winner of the bid signs a deal with eBay, they are likely to face a corporate merger evaluation from the Fair Trade Commission here, which will review if the merger violates monopoly regulations.

By Jo He-rim (herim@heraldcorp.com)