EBay To Buy Control Stake In SKorean Marketplace

KELLY OLSEN

SEOUL, South Korea (AP) — EBay Inc. said Thursday it plans to pay as much as $1.2 billion for control of South Korea's top online marketplace, potentially making it one of the company's largest acquisitions as it moves to expand in Asia.

San Jose, Calif.-based eBay and Gmarket Inc. said that eBay will pay $24 a share in cash to purchase all outstanding common shares and American depository shares in the South Korean company. The offer represents a premium of 20 percent over the Wednesday closing price of Gmarket's U.S.-traded shares.

The final purchase price could reach $1.2 billion if all shares are purchased, the companies said. EBay would take a stake of at least 67 percent, based on agreements reached so far with Gmarket management and shareholders and new shares the South Korean company will issue. EBay plans to finance the deal with cash it has outside the United States.

The deal comes as eBay struggles with declining earnings and revenue amid the U.S. recession and just two days after it announced plans to spin off Internet communications service Skype, which eBay acquired in 2005 for $2.6 billion, only to later write down much of its value because of a failure to find enough synergies.