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Australia's carsales.com to take control of S.Korean JV for US$184m
[BENGALURU] Carsales.com Ltd said it had signed a memorandum of understanding with SK Holdings Co Ltd to buy the remaining 50.1 per cent stake in South Korean joint venture Encar.com for about A$244 million (S$250.1 million), before adjusting for working capital.
The deal was expected to be signed next month and completed in January, it added.
Australia-based carsales.com had bought a 49.9 per cent stake in Encar.com in April 2014.
The online auto classifieds company's existing stake in the joint venture would be revalued for accounting purposes, creating a one-off non-cash gain of about A$100 million.
"This acquisition is a significant milestone in carsales' long-term strategy to be the global leader in online auto classifieds," chief executive Cameron McIntyre said.
The company anticipated the deal to be neutral to adjusted earnings in fiscal 2018 and accretive in fiscal 2019 and beyond.
Shares of carsales.com fell as much as 1.8 per cent in early trade, posting their biggest intra-day drop since September.