A subsidiary of South Korea's E-Mart Inc. has signed an agreement to form a joint venture with Alibaba's e-commerce unit AliExpress, according to a regulatory filing.

The newly formed JV will own 100% of E-Mart's e-commerce subsidiary Gmarket.

The move follows a Bloomberg report that Alibaba is close to a deal to merge its South Korean business with E-Mart's e-commerce platform to better compete in South Korea's online retail space.

And the new entity will be valued at about $4 billion, the report said, citing people familiar with the matter.