SEOUL, June 9 (UPI) — South Korean retail giants Lotte Shopping and Shinsegae Group said they have submitted binding bids to purchase eBay’s South Korean unit.
Representatives of the companies confirmed to UPI News Korea on Tuesday that they made the bid before the Monday deadline but wouldn’t comment further.
Lotte is the country’s largest retail conglomerate, while Shinsegae has joined hands with Internet service provider Naver to take over eBay Korea, the third-largest e-commerce player in the nation.
Two other contenders – mobile operator SK Telecom and private equity fund MBK Partners – entered the preliminary bids in March, but have since dropped out.
eBay Korea accounts for about 12 percent of the market, following closely behind Naver and Coupang. It operates prominent brands such as Gmarket, Auction and G9.
eBay Korea was once a dominant e-commerce platform but lost its leading position during the past few years because of new market competitors such as Coupang, which went public on New York Stock Exchange this year.
“It appears that eBay Korea is looking to receive $4.5 billion for the 100 percent stake of its Korean operation. But the final price is expected to be lower than that,” HMC Investment & Securities analyst Kim Hyun-yong told UPI News Korea.
“I think that the final valuation would be somewhere between $3.6 billion and $4.5 billion,” he projected.
From the perspective of potential buyers Lotte and Shinsegae, observers point out that the acquisition of eBay Korea will immediately boost their market share.
Although they are leading companies in the offline retail industries, their combined market shares in the e-commerce segment are estimated to be lower than 10 percent.
Seo Yong-koo, a professor of business administration at Sookmyung Women’s University, elaborated on the collaboration between Shinsegae and Naver.
“Naver is a behemoth in the online ecosystem, while Shinsegae is an offline powerhouse. They are expected to create a synergy effect by sharing customer data,” Seo said. “As a result, a big-size e-commerce retailer will be born, one even comparable to Coupang.”