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eBay Korea: Kakao and MBK Partners eyeing the acquisition of the e-commerce company

Photo by: Imagine WiMax/Flickr (CC BY-SA 2.0)

eBay Korea may finally be sold as it was reported that Kakao Corp and MBK Partners are interested in acquiring a controlling stake of the company. It was said that the two firms are the leading candidates that may buy the South Korean division of the e-commerce business.

eBay’s impending sale

eBay Korea ranks no. 2 in the e-commerce market, and it was put up for sale just last month. Insiders from the investment banking industry revealed that eBay’s financial advisers, Goldman Sachs and Morgan Stanley, have been giving out teaser letters to possible buyers for some time now, so the company has already shortlisted candidates.

After this, eBay Korea will soon be meeting with them to sign non-disclosure agreements and furnish them with details about the firm. As of this time, the value of the company is unknown to the public, but it was estimated to be about KRW5 trillion or $4.5 billion, The Korea Times reported.

How the acquisition will be beneficial for Kakao and MBK Partners

If Kakao owns eBay Korea, it can place its e-commerce subsidiary Kakao Commerce to manage the business. This is because this arm of Kakao Corp is focused on its main business, which is e-coupons that are being used through Kakao Talk, the instant message application of the company.

Kakao Commerce also started to sell luxury items online, and the acquisition of eBay Korea will surely help in the effort to expand this product line. Additionally, it will certainly increase the number of items being sold on the platform. Since eBay is also the country’s second-biggest player in the market, Kakao will instantly have this no. 2 ranking.

For MBK Partners, eBay may be linked with its Homeplus company. It is a leading discount store retail chain in South Korea, and if MBK successfully acquires it, the e-commerce platform will really be useful since buyers today shop online. Moreover, the Asian private equity firm may immediately enter the online business with the eBay marketplace.

Letting go of eBay Korea

The American e-commerce operator that owns eBay announced in January that it is selling its Korean division. As per Yonhap News Agency, the hunt for potential buyers has begun, and whichever investor will acquire it will also be able to benefit from Gmarket, G9, and Auction since these retail outlets also operate in the eBay marketplace.

Now, as for the reason for the sale, eBay shared that the decreasing market share in recent years made them decide to take this step.

"eBay has initiated a process to explore, review and evaluate a range of strategic alternatives for its Korea business," the company based in California said in a statement. "The company is considering options that would maximize value for its shareholders and create future growth opportunities for the business."

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