eBay to Buy South Korea's Gmarket for $1.2B

Updated from 12:10 a.m. EDT

SEOUL, South Korea -- eBay(EBAY Quote) plans to pay as much as $1.2 billion to purchase a majority stake in South Korea's top online marketplace Gmarket(GMKT Quote).

San Jose, Calif.-based eBay and Gmarket said that eBay will make a cash tender offer of $24 a share to purchase all outstanding common shares and American depository shares in Gmarket. If successful, eBay said it would take a stake of at least 67% in Gmarket.

"Asia is a very fast moving market, fast growing market," John Pluhowski, an eBay vice president said in Seoul. The acquisition "also allows us to build a platform for growth in Korea but also in regions throughout Asia and beyond."

Pluhowski said the acquisition is "one of the largest since the company has been acquiring companies throughout the decade."

News of the deal comes two days after eBay said it plans to spin off its Internet communications service Skype through an initial public offering, undoing a $2.6 billion acquisition that puzzled analysts and which eBay struggled to justify.

The release said the agreement calls for eBay to combine Gmarket with eBay's existing online marketplace in South Korea, Internet Auction Co.

"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," said John Donahoe, eBay's president and CEO, in the press release.

eBay said in September it received preliminary conditional approval from South Korean regulators for its potential purchase of a stake in Gmarket.

The venture is the latest for eBay into the online auction market outside the United States.

Shares of Gmarket closed Wednesday at $19.96.

Separately, Yahoo!(YHOO Quote) announced that it has agreed to sell its roughly 10% share in Gmarket to eBay as part of eBay's announced tender offer. Yahoo said it would maintain its other operations in South Korea following the sale.