Not even a week after reports began speculating that eBay were close to closing a deal to sell the eBay South Korea operation, Emart announces that they have reached an agreement for the purchase of eBay’s businesses in Korea. Execution of the fully negotiated and finalized purchase agreement is contingent upon the Bank of Korea’s acceptance of the filings related to foreign exchange transactions.
As stated in eBay’s press release the form of the purchase agreement, agreed upon by the parties, is subject to change only by mutual agreement between eBay and Emart. Pursuant to the transaction, eBay will sell an 80.01% stake in its Korean businesses for 3.44 trillion KRW (or approximately $3.0 billion USD1) of gross cash proceeds.
E-Mart is the largest retailer in South Korea founded in 1993 by Shinsegae. The purchase of a majority holding in eBay South Korea would help them compete against Coupang, who are the largest ecommerce player in the region.
“After a thorough strategic review and competitive sale process, we are excited to come to an agreement with Emart. This deal brings together two strong ecommerce and retail companies that can unlock tremendous potential in Korea and provide more choice for customers. We believe this move further optimizes our portfolio and creates value for eBay shareholders.”
– Jamie Iannone, Chief Executive Officer, eBay
Together, eBay Korea and Emart can build a 360-degree ecosystem which will allow full touch points with customers in categories ranging from grocery to general merchandise. Over the next four years, Emart plans to invest more than 1 trillion KRW in fulfillment centers. Offline stores will also be utilized to serve as fulfillment centers, reinforcing Shinsegae Group’s supply chain management system. This will enhance Emart’s same-day delivery capabilities and improve fulfillment centers’ capacity utilization. For years the team has been working on pre-emptive, strategic redeployment of its physical property to digital assets, in preparation for a rapidly evolving retail environment heightened by technology innovations.