eBay Buys Into South Korea’s Gmarket

Online auction giant eBay has bought a controlling share of South Korean online retailer Gmarket, essentially taking over South Korea's customer-to-customer market.

Online auction giant eBay has been in negotiations to take a stake in South Korean online retailer Gmarket for quite a while, but many industry watchers were skeptical a deal would ever go through. Not so: today, reports have eBay inking a deal to acquire a controlling stake in Gmarket for some $413 million, which would represent more than a 32 percent premium over the company’s latest closing price. The shares would come from Gmarket’s current top shareholder, Interpark, and Gmarket’s current chairman.

eBay primarily competes with Gmarket in South Korea via its Internet Auction Company subsidiary; Gmarket runs a number of customer-to-customer (meaning, where users sell items to each other) online marketplaces and has a registered membership of more than 10 million consumers. Combined, eBay’s existing Internet Auction Company and Gmarket would account for over 85 percent of South Korea’s online customer-to-customer market; nonetheless, eBay had been able to get preliminary approval for the deal from South Korea’s antitrust authorities.

Neither eBay nor Gmarket would immediately confirm the deal; industry watchers expect the buy-in to be formalized in the middle of the week.