eBay announced an agreement Wednesday to acquire Gmarket for a price of
up to $1.2 billion, and Yahoo has agreed to sell its 10 percent stake
in the South Korean e-commerce site in a move that would raise about
Gmarket's board unanimously approved eBay's tender offer, in
which the online auction and commerce site will pay a cash price of
31,767 Korean won, or $24, per share for all common shares and all
American Depository Shares. eBay said it's assured of owning at least
67 percent of the company, and if it acquires all shares in the tender
offer, the total price will reach about $1.2 billion.
eBay said it will combine Gmarket with its own Korean
operations, the Internet Auction Co. it acquired in 2001, , though it
will still use separate Web sites. "This deal creates strong
operational synergies between the two market leaders, offers more
opportunities for sellers and enhances our ability to serve
complementary consumer segments," said John Donahoe, eBay's president
and chief executive officer, in a statement.
eBay, once an e-commerce darling but now under more financial pressure, is making dramatic moves. The company plans a 2010 initial public offering to spin off Skype, its Internet telephony group.
The Gmarket offer, pending final approval by Korean antitrust
authorities, would give eBay a significant new source of revenue. While
its existing IAC business produced revenue of $161 million on $2.2
billion in gross merchandise sales, Gmarket produced $221 million on
$3.2 billion in sales, eBay said. The company's offer is a 20 percent
premium over Gmarket's closing price of $19.96.
With the recession hurting advertising revenue and Google supplying relentless competition, Yahoo is under pressure of its own. The company could announce more layoffs
as it reports financial results next Tuesday, and raising $120 million
could also help appease shareholders dissatisfied with Yahoo's