Shinsegae to acquire 80% stake in E-Mart for $3.05b

It will invest over $884.36m (KRW1t) over the next four years in warehouses.

Shinsegae’s discount store chain E-Mart has agreed with eBay to acquire an 80% stake in the latter’s South Korean e-commerce unit for $3.05b (KRW3.44t), Yonhap reported. The deal is expected to close by the end of 2021 or early next year.

E-Mart said that it would strengthen ties with eBay Korea and invest more than $884.36m (KRW1t) over the next four years in fulfillment centers or warehouses. It also expects the acquisition to ramp up E-Mart's online sales to 50% of the total.

EBay Korea is a major player in South Korea's e-commerce sector and operates platforms such as Gmarket and Auction. The acquisition is expected to bolster E-Mart's parent and retail giant, Shinsegae Group, to take on local e-commerce rivals.

EBay Korea accounted for around 12% of the local market last year, whilst internet giant Naver held the top spot with 18%, followed by Coupang at 13%. Shinsegae's SSG.com held an estimated 3%, and the acquisition would catapult its market share to second place.

While Shinsegae had reportedly formed a consortium with Naver to acquire eBay Korea, the internet giant later pulled out. Naver was amongst a list of companies that had initially competed to acquire eBay Korea, including wireless carrier SK Telecom and Lotte Shopping.