Alibaba Is Said to Near $4 Billion Deal With Korea’s E-Mart

Posted by Admin December 26, 2024 Bussiness

Alibaba Is Said to Near Billion Deal With Korea’s E-Mart

(Bloomberg) — Alibaba Group Holding Ltd. is nearing a deal to merge its South Korean operations with E-Mart Inc.’s e-commerce platform to better compete in the country’s fast-paced online retail sector, according to people familiar with the matter.

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Alibaba and South Korea’s E-Mart are close to combining their online-shopping assets in a transaction that would value the new entity at about $4 billion, the people said, asking not to be identified because the deliberations are private. The companies are finalizing details of a joint-venture deal that could be announced as soon as this week, the people said.

Talks are still ongoing and an agreement may take longer to be reached, the people said. Representatives for Alibaba and E-Mart didn’t immediately respond to requests seeking comment.

A potential deal would help the companies face off against local rivals including Naver Corp. and Coupang Inc. This month, South Korea’s consumer confidence dropped by the most since the outbreak of Covid-19, battered by the political turmoil triggered by President Yoon Suk Yeol’s declaration of martial law and his impeachment.

Alibaba has been seeking to expand its international footprint to make up for slower growth in its core Chinese e-commerce business. The internet pioneer’s domestic e-commerce operations reported anemic growth in the September quarter, dragging down financial results that benefited from progress in its cloud division and international business, which encompasses Lazada and the Temu-like AliExpress.

E-Mart has been expanding its e-commerce business both organically and via acquisitions. In 2021, it acquired a controlling stake in eBay Inc.’s South Korean online marketplace for about $3 billion, expanding its customer base in categories such as groceries and general merchandise.

E-Mart shares have dropped about 7% this year, valuing the company at $1.4 billion. Alibaba’s Hong Kong-listed stock has gained around 11% this year, giving the company a market value of more than $200 billion.

–With assistance from Dong Cao, Yoolim Lee, Heejin Kim, Luz Ding, Claire Che and Debby Wu.