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Fair Trade Commission of South Korea has approved the proposed acquisition of Gmarket, Inc. by eBay, Inc., a US-based online marketplace for the sale of goods and services.
The approval was granted on the conditions that there will be a ban on raising sales commissions for the next three years, and increase in fees related to advertisements and other services will be kept below the South Korean inflation rate.
Update on April 15, 2009:
eBay has entered into a share allocation and tender offer agreement to acquire all outstanding common shares and American Depositary Shares of Gmarket for a total consideration of up to approximately $1,200 million in cash.
Interpark Corporation and its Chairman, Ki Hyung Lee, current holders of approximately 34% of the outstanding shares of Gmarket have signed agreements to tender their shares to eBay. Yahoo!, Inc., a US-based internet and media communications company, has also agreed to sell its 10% stake in the company.
At closing, eBay will hold at least 67% of Gmarket as a result of shares tendered pursuant to agreements to tender with members of management and other investors sufficient to satisfy the minimum tender condition, as well as new shares issued by Gmarket in connection with the combination of Gmarket and eBay's existing Korean marketplace business, Internet Auction Co., Ltd.
The transaction is expected to close in the second quarter of 2009.
Update on April 13, 2009:
eBay has agreed to acquire a controlling stake in Gmarket, a Korea-based retail e-commerce marketplace.
eBay has agreed to acquire a 34.2% stake from InterPark, a Korea-based internet shopping mall operator, and Ki Hyung Lee for $24 per share. The offer price represents a premium of 32.5%.
Announcement (September 25, 2008):
eBay has received conditional approval from South Korea's antitrust authority to acquire a controlling stake in Gmarket.
Rumor (March 11, 2008):
InterPark is planning to sell its entire 29.4% stake in Gmarket to eBay for more than KRW4,00,000 million ($419.02 million).
KT Corporation, Yahoo, Inc., and SK Telecom Co., Ltd. are also bidding for the stake in Gmarket.
Morgan Stanley is acting as financial advisor and Brunswick Group as PR advisor to eBay.
Deal Value (US$ Million) 1200 Deal Type Acquisition Sub-Category Majority Acquisition Deal Status Announced: 2008-09-25
Deal Participants
Target (Company) Gmarket, Inc. Acquirer (Company) eBay, Inc. Vendor 1 (Company) InterPark Corporation Vendor 2 (Company) Yahoo!, Inc.
Deal Rationale
The acquisition of a controlling stake in Gmarket would enable eBay to strengthen its position in South Korea's customer-to-customer online market. The combination of Gmarket and Internet Auction would strengthen eBay's position in e-commerce markets. This deal creates operational synergies offering more opportunities for sellers enhancing ability to serve complementary consumer segments. This transaction will accelerate Gmarket's expansion strategies beyond Korea. Through the combined businesses, eBay will be able to offer benefits for Gmarket and its Internet Auction sellers, such as tools for quick, simultaneous listings across both platforms, and enhanced experiences for buyers through improved selection, incentives and loyalty programs. eBay also expects the combination with Gmarket to provide a potential platform for further expansion within Asia.
Bid Premium ($ per share) 32.5 % Acquisition 67%
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