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EBay buys control of Gmarket
By Kelly Olsen |
April 17, 2009, Friday
|
Print Edition
Print Edition
EBAY Inc said yesterday that it plans to pay as much as US$1.2 billion for control of South Korea's top online marketplace, potentially one of the company's largest acquisitions as it moves to expand in Asia.
San Jose, California-based eBay said that it will make a cash tender offer of US$24 a share to purchase all outstanding common shares and American depository shares in the South Korean company, Gmarket Inc.
The final purchase price could reach US$1.2 billion if all shares are tendered, the companies said in a release. EBay would take a stake of at least 67 percent, they said, based on tender agreements reached so far with Gmarket management and shareholders and new shares the South Korean company will issue.
The deal comes as eBay struggles with declining earnings and revenue amid the United States recession and just two days after it announced the planned spinoff of Internet communications service Skype, which it acquired in 2005 for US$2.6 billion.
EBay said it sees a bigger presence in Internet-savvy South Korea the world's sixth-largest e-commerce market, as a way to tap Asia's growth.
"Asia is a very fast moving market, fast growing market," John Pluhowski, an eBay vice president, said in Seoul. The proposed acquisition "also allows us to build a platform for growth in Korea but also in regions throughout Asia and beyond."
Major acquisition
Pluhowski said the acquisition would be "one of the largest since the company has been acquiring companies throughout the decade."
Besides Skype, another high-profile acquisition for eBay came in 2002 when it bought online payment service PayPal for US$1.3 billion.
EBay and Gmarket, which is unlisted in South Korea, said that they had agreed for the US company to combine Gmarket with eBay's existing online marketplace in South Korea, Internet Auction Company, or IAC.
"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 CEO, said in the release.
San Jose, California-based eBay said that it will make a cash tender offer of US$24 a share to purchase all outstanding common shares and American depository shares in the South Korean company, Gmarket Inc.
The final purchase price could reach US$1.2 billion if all shares are tendered, the companies said in a release. EBay would take a stake of at least 67 percent, they said, based on tender agreements reached so far with Gmarket management and shareholders and new shares the South Korean company will issue.
The deal comes as eBay struggles with declining earnings and revenue amid the United States recession and just two days after it announced the planned spinoff of Internet communications service Skype, which it acquired in 2005 for US$2.6 billion.
EBay said it sees a bigger presence in Internet-savvy South Korea the world's sixth-largest e-commerce market, as a way to tap Asia's growth.
"Asia is a very fast moving market, fast growing market," John Pluhowski, an eBay vice president, said in Seoul. The proposed acquisition "also allows us to build a platform for growth in Korea but also in regions throughout Asia and beyond."
Major acquisition
Pluhowski said the acquisition would be "one of the largest since the company has been acquiring companies throughout the decade."
Besides Skype, another high-profile acquisition for eBay came in 2002 when it bought online payment service PayPal for US$1.3 billion.
EBay and Gmarket, which is unlisted in South Korea, said that they had agreed for the US company to combine Gmarket with eBay's existing online marketplace in South Korea, Internet Auction Company, or IAC.
"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 CEO, said in the release.
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