eBay (EBAY) Expands Into Korea With Gmarket (GMKT) At $24 Per Share

April 15, 2009 11:16 PM EDT

eBay Inc. (Nasdaq: EBAY) and Gmarket Inc. (Nasdaq: GMKT) jointly announced a definitive agreement for eBay to combine Gmarket, Korea's leading e-commerce business, with eBay's existing online marketplace in Korea.

Under the terms of the agreement, eBay will make a cash tender offer of $24.00 per share for all outstanding Gmarket common shares and American Depositary Shares, for a total purchase price of up to approximately $1.2 billion assuming all outstanding shares are tendered. As of April 15, 2009, the consideration of $24.00 per share was equivalent to approximately 31,767 Korean won per share.

At closing, eBay will hold at least 67% of Gmarket as a result of shares tendered pursuant to agreements to tender with members of management and other investors sufficient to satisfy the minimum tender condition, as well as new shares issued by Gmarket in connection with the combination of Gmarket and eBay's existing Korean marketplace business, Internet Auction Company. Shareholders that have signed agreements to tender include Interpark Corporation and its chairman, Ki Hyung Lee, current holders of approximately 34% of the outstanding shares of Gmarket. eBay will combine Gmarket's operations with IAC, while maintaining separate sites.

"The combination of Gmarket and IAC establishes an exceptionally strong leadership position for eBay in one of the world's largest, most dynamic and innovative e-commerce markets," said John Donahoe, eBay's president and chief executive officer. "This deal creates strong operational synergies between the two market leaders, offers more opportunities for sellers and enhances our ability to serve complementary consumer segments."

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