Alibaba Group Holding Ltd. ( BABA )  is reportedly close to merging its South Korean operations with E-Mart Inc. in a deal valued at approximately $4 billion. This strategic move aims to bolster their position in South Korea’s competitive online retail market.

What Happened: The potential joint venture would combine the e-commerce assets of both companies, creating a stronger entity to challenge local competitors like Naver Corp. and Coupang Inc. ( CPNG ) . Discussions are ongoing, and while an announcement could come as soon as this week, finalizing the agreement may take longer, Bloomberg reported on Thursday.

The merger comes as Alibaba ( BABA ) seeks to expand its international presence amid slowing growth in its core Chinese market. Meanwhile, E-Mart has been actively growing its e-commerce segment, notably acquiring a controlling interest in eBay Inc.’s South Korean marketplace in 2021 for roughly $3 billion.

Neither Alibaba ( BABA ) nor E-Mart has commented on the matter yet to Benzinga.

See Also: Cathie Wood-Led Ark Invest’s Monday Moves: Dumps Tesla, Palantir Stock, Adds Amazon

This development occurs against a backdrop of declining consumer confidence in South Korea, impacted by political instability following President Yoon Suk Yeol’s declaration of martial law and subsequent impeachment.

Why It Matters: The potential merger between Alibaba ( BABA ) and E-Mart is part of Alibaba’s broader strategy to refocus on its core e-commerce operations. Earlier this year, Alibaba ( BABA ) announced plans to divest several consumer sector assets, including its grocery business Freshippo and retailer RT-Mart. This move aligns with the company’s strategic pivot under Chairman Joe Tsai and CEO Eddie Wu, aiming to shed non-essential and unprofitable units.

Moreover, Alibaba’s recent investment of $71.4 million in South Korean apparel brand Ably Corp has turned it into the country’s first unicorn of 2024, highlighting Alibaba’s growing interest in the South Korean market. This investment valued Ably at over $1 billion, marking a significant increase from its previous valuation.

Read Next: 

‘Rich Dad Poor Dad’ Author Robert Kiyosaki Warns Of Global Financial Crisis: ‘Invest In Real Assets To Protect Your Wealth by Investing in Real Assets’

Disclaimer: This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors.

Image via Shutterstock