Ebay to sell South Korean arm for $5bn in latest major strategic change

Ebay has put its South Korean unit on the market for nearly $5 billion (£3.91 billion) in its latest drastic reorganisation effort.

The retailer is selling 100 per cent of its South Korean operations, which includes three of the country’s largest online marketplaces Ebay Auction, Gmarket and G9 with a combined annual transaction value of 16 trillion won (£11 billion).

According to The Korean Economic Daily, which first reported the sale, potential buyers include include Korean retail giants Lotte, Shinsegae and Hyundai Department Store alongside private equity firm MBK Partners.

Gmarket was bought by Ebay for $1.2 billion (£940 million) in 2009 combining it with its own operations which at the time represented 87 per cent on South Korea’s online consumer-to-consumer market.

This is the latest in a string of major structural changes to Ebay made over the last year, driven by activist investors Elliott Management and Starboard Value.

READ MORE: Ebay UK to divorce PayPal and take complete control of sale and payments

The pair purchased a stake in Ebay and introduced members to its board in early 2019, with a view to boosting the brands profitability in the face of growing competition from the likes of Amazon and Walmart.

Last week Ebay announced that it was set to end its deeply embedded relationship with PayPal, and launch its own ‘managed payment experience’ for both buyers and sellers.

PayPal and Ebay are set to complete their divorce agreement in July, giving the online marketplace freedom to take control and dramatically expand its own payments experience.

In February, it was reported that Ebay was close to selling its classified-ads business for up to $10 billion (£7.8 billion).

In March Ebay conceded and launched an in-depth strategic review of its business, with the pair pushing it to offload its ticket sale business StubHub and its classified-ads business and focus on its core marketplace offering.

This culminated in the shock departure of its chief executive David Wenig in September who said it was clear he was “not on the same page as my new board”, and the $4 billion (£3.15 billion) sales of StubHub to rival Viagogo in November.

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