Ebay to buy stake in S. Korean online marketplace
Lee Jay, corporate senior vice president of eBay Inc. and general manager of eBay Asia Pacific, center, speaks to media as Park Joo-man, chief executive of Internet Auction Co., left, and Ku Young-bae, chief executive and representative director of Gmarket, listen during their press conference in Seoul, South Korea, Thursday, April 16, 2009. EBay Inc. said it plans to pay as much as $1.2 billion to purchase a majority stake in Gmarket Inc. , South Korea's top online marketplace.(AP Photo/Ahn Young-joon)
SEOUL, South Korea - EBay Inc. said Thursday it plans to pay as much as $1.2 billion to purchase a majority stake in South Korea's top online marketplace in a bid to expand its presence in Asia.
San Jose, Calif.-based eBay and Gmarket Inc. said that eBay will make a cash tender offer of $24 a share to purchase all outstanding common shares and American Depository shares in the South Korean company. If successful, eBay said it would take a stake of at least 67 percent in Gmarket.
"Asia is a very fast moving market, fast growing market," John Pluhowski, an eBay vice president said in Seoul. The acquisition "also allows us to build a platform for growth in Korea but also in regions throughout Asia and beyond."
Pluhowski said the acquisition is "one of the largest since the company has been acquiring companies throughout the decade."
News of the deal comes two days after eBay said it plans to spin off its Internet communications service Skype through an initial public offering, undoing a $2.6 billion acquisition that puzzled analysts and which eBay struggled to justify.
EBay and Gmarket made the announcement in a statement handed out Thursday in South Korea and released late Wednesday in the U.S. It said the agreement calls for eBay to combine Gmarket with eBay's existing online marketplace in South Korea, Internet Auction Company.
"The combination of Gmarket and IAC establishes an exceptionally strong leadership position for eBay in one of the world's largest, most dynamic and innovative e-commerce markets," John Donahoe, eBay's president and chief executive officer, said in the release.
Park Joo-man, South Korean country manager for eBay, said that Gmarket and Internet Auction had a combined market share of about 36 percent in South Korea as of last year.
Separately, Yahoo Inc. announced that it has agreed to sell its approximate 10 percent share in Gmarket to eBay as part of eBay's announced tender offer. Yahoo said it would maintain its other operations in South Korea following the sale.
EBay said in September it received preliminary conditional approval from South Korean regulators for its potential purchase of a stake in Gmarket, though at the time the proposed stake size was far smaller.
A service of the Associated Press(AP)