[단독] Kakao Shinsegae to acquire eBay Korea

It has been confirmed that Kakao, Shinsegae Group, and MBK Partners are participating in the acquisition of eBay Korea, the top 3 in the domestic e-commerce market.

As global private equity funds such as Shinsegae and Kakao, MBK Partners, Carlisle, and KKR are preparing for bidding, the acquisition of eBay Korea, which has an annual transaction amount of 20 trillion won, is expected to heat up. With Coupang’s listing on the New York Stock Exchange, it is attracting attention as a large-scale event that shakes the domestic e-commerce market.

According to the investment banking (IB) industry on the 3rd, Morgan Stanley and Goldman Sachs, the organizers of the sale of eBay Korea, informed potential takeover candidates of the preliminary bidding schedule in the middle of this month. It is known that large private equity funds such as KKR, Carlyle, and MBK Partners, along with Shinsegae Group, a major domestic distribution company, and Kakao, an information technology (IT) powerhouse, announced their intention to participate and received an investment prospectus (IM) that outlined the sale of eBay Korea. EBay Korea and the sale organizer are planning to make a short list (qualified candidates for acquisition) through preliminary bidding in the middle of this month.

An official from the IB industry said, “After an internal review, Kakao and Shinsegae have been preparing for preliminary bidding by discussing sales advice with a law firm recently.” As In eBay Korea comes out for sale, it is expected that a takeover battle will take place,” he explained.

Shinsegae, a traditional distribution powerhouse, and Kakao, an emerging “catfish” in the distribution market, are attracting attention as strong candidates. Shinsegae Group, a relatively latecomer of e-commerce, can catch up with leaders such as Naver and Coupang at once if it acquires eBay Korea. According to WiseApp and Kyobo Securities, the transaction volume of SSG (SG).com, an integrated online mall of Shinsegae Group last year, amounted to 3.900 trillion won, not far from Naver and Coupang, which exceeded 20 trillion won. It is only half the level.

If you hold eBay Korea in your arms, SSG.com’s transaction amount will reach 25 trillion won, and it can quickly rise to the second place after Naver. The fact that the group is focusing its efforts on growing SSG.com is also expected to increase the motivation for the acquisition of Shinsegae Group. E-Mart, the parent company, set the target for SSG.com transaction volume this year at 4.8 trillion won, and decided to expand the PP (Picking & Packing) center and the online-only distribution center Neo (NEO), which uses E-Mart offline stores as distribution centers.

Kakao, which has a powerful messenger platform, has an opportunity to enter the e-commerce market, focusing on its subsidiary Kakao Commerce. It is known that Kakao entered the e-commerce industry with the’Kakao Talk Gift’ function launched in 2010, and recently increased the transaction amount of over 3 trillion won. In particular, Kakao Commerce has been growing successfully with a double-digit operating margin even in the e-commerce market, which has a large deficit. However, compared to Naver and Coupang, the transaction volume is considered a disadvantage.

Consumers cheered at Naver and Coupang amid a surge in demand for non-face-to-face shopping last year. It focused on Naver Shopping’s search accessibility, strong membership benefits, and killer services such as Coupang’s rocket delivery. However, if Kakao becomes the winner in the eBay Korea takeover, it will be an opportunity to turn the second-final composition of Naver and Coupang into the third-final.

The bidding of large private equity funds is expected to act as a variable for strategic investors (SI) such as Shinsegae and Kakao. Private equity funds can be acquired independently with strong financial power, but they can also form partnerships with SIs such as Shinsegae or Kakao at any time. The fact that eBay Korea’s ransom price is expected to be around 4 trillion won to 5 trillion won is raising the possibility that SI will partner with financial investors (FI) to expand its funding power.

However, MBK Partners can actually be classified as SI as they have Homeplus that competes with Shinsegae E-Mart. MBK Partners can create a big picture of establishing another giant distribution company with a bolt-on strategy that links Homeplus for offline distribution and eBay Korea for e-commerce.

An official from the IB industry said, “Coupang made the Corona 19 crisis an opportunity for non-face-to-face shopping, and the market is changing significantly as it raises enormous additional funds from listing in the United States.” It will be,” he predicted.

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