Ebay has offered to buy South Korea’s Gmarket for $1.2 billion in cash, seeking to expand in the world’s most connected Internet market after posting its first quarterly sales decline.
The operator of the most visited US e-commerce site agreed to buy 67 per cent of Gmarket from investors including Yahoo and will make a general offer of $24 per share, San Jose, California-based Ebay said in a statement.
That’s 20 per cent more than Gmarket’s closing price of $19.96 in Nasdaq Stock Market composite trading yesterday.
Gmarket would be combined with Ebay’s Seoul-based unit Internet Auction Co., more than doubling the US company’s South Korean sales and building a platform for expansion in Asia. South Korea is the world’s sixth-largest e-commerce market after the US, Germany, UK, China and Japan, according to EBay.
“Ebay probably found Gmarket’s business model attractive and is likely to leverage that to expand in other Asian countries,” said Kim Chang Kwean, an analyst at Daewoo Securities in Seoul.
“For Gmarket, it can also utilize Ebay’s global network to enter overseas markets.” In Asia, Ebay’s units operate in India, China and Taiwan. The company also has partnerships in Japan and Thailand.
Revenue from Ebay’s marketplaces businesses, including its namesake auction and fixed-price website, fell 16 per cent to $1.27 billion in the fourth quarter. About 55 per cent of the division’s revenue came from outside the US, compared with 54 per cent a year earlier, according to Ebay.
Gmarket, whose sales rose 25 per cent to 279 billion won ($210 million) last year, saw the value of all goods sold through its web site increase 23 per cent to 4 trillion won in 2008.
Bloomberg