eBay to acquire Korea's Gmarket for $1.2 bn

America's largest online auction firm eBay Inc has entered into an agreement to acquire majority stake in South Korea's Gmarket for up to $1.2 billion, a move which will help in expanding its Asian operations.

As per the agreement, eBay would combine its existing Korean marketplace business Internet Auction Company (IAC) with Gmarket.

Further, eBay would make a cash tender offer of $24 a share for all outstanding Gmarket common shares and American Depositary Shares, for a total purchase price of up to about $1.2 billion, the two companies said in a joint statement.

On completion of the deal, eBay would hold at least 67 per cent of Gmarket as a result of shares tendered and issue of new shares by the Korean firm  in connection with the combination of Gmarket and eBay's IAC.

"The transaction, which is conditioned on the tender of a majority of the outstanding shares and American Depositary Shares of Gmarket on a fully diluted basis, final Korean antitrust clearance and other customary closing conditions, is expected to close in the second quarter of 2009," the statement said.