Lee & Ko represented Shinsegae and E-Mart in their execution of a share subscription agreement on October 31, 2018 with two private equity investors, BRV Lotus International Limited and Commercial Advantages Limited (an investment holding company established by Affinity) (the “Investors”), in connection with (i) a vertical spin-off of Shinsegae and E-Mart’s respective e-commerce business, (ii) a merger between the newly established spun-off entities which will then operate SSG.COM and (iii) the Investors’ investment in the new corporation following the merger in the form of a new share subscription in an amount of KRW 1 trillion.
Each of the board of directors of Shinsegae and E-Mart approved the vertical spin-off plan of each of their e-commerce business that resulted in the establishment of new spin-off entities for both companies on December 27, 2018. The Investors deemed the equity value of the new combined corporation following the merger to be KRW 3.3 trillion.
This multi-transaction composed of three transactions (spin-off of Shinsegae and E-Mart’s e-commerce business, merger between newly established entities, and investment from external investors into the combined entity following the merger), in which all aspects of the transactions were advised simultaneously. Lee & Ko contributed to the success of the execution of the relevant agreements by providing legal advice throughout the entire transaction on a wide range of issues such as the various applicable statutes, licenses, personal information and certain tax matters concerning the spin-off and merger for several months, as well as negotiating the share subscription agreement and other ancillary agreements including the shareholders agreement.
Lee & Ko had recently provided advice on a similar transaction in SK Planet’s horizontal spin-off of its e-commerce (open market) business (11 Street) followed by a PE capital investment of KRW 0.5 trillion. Lee & Ko proved their expertise and strength in the e-commerce business by consecutively advising on these big high-profile deals within the market.
>
[koreaherald] Shinsegae signs W1tr investment deal for e-commerce spinoff