eBay and Adevinta announced a definitive agreement for eBay to transfer its Classifieds business to Adevinta. This move will significantly strengthen both entities and see them compete with major e-commerce businesses.
eBay Inc (NASDAQ: EBAY) has announced today that it has entered into an agreement with Adevinta ASA (OSLO: ADE) for eBay to transfer its classifieds business to Adevinta in a whopping $9.2 billion deal. The mega-deal is expected to complete by the first quarter of 2021.
“We are pleased we reached an agreement with Adevinta that brings together two great companies,” said Jamie Iannone, Chief Executive Officer of eBay. “eBay believes strongly in the power of community and connections between people, which has been essential to our Classifieds businesses globally. This sale creates short-term and long-term value for shareholders and customers, while allowing us to participate in the future potential of the Classifieds business.”
According to the agreement, eBay is expected to receive a total of $2.5 billion in cash and approximately 540 million in Adevinta shares.
As a result, the transaction will represent an equity stake of approximately 44% based on the number of Adevinta’s outstanding shares, as of the end of the second quarter, and a 33.3% voting stake.
What Will Deal between Adevinta and eBay Bring?
Once the transaction goes through, eBay will be the largest shareholder of Adevinta.
“With the acquisition of eBay Classifieds Group, Adevinta becomes the largest online classifieds company globally, with a unique portfolio of leading marketplace brands. We believe the combination of the two companies, with their complementary businesses, creates one of the most exciting and compelling equity stories in the online classifieds sector,” said Rolv Erik Ryssdal, CEO of Adevinta.
“We have been impressed with eBay Classifieds Group’s achievements in recent years, leading across markets with nationally recognized brands including Mobile.de, Gumtree, Marktplaats, dba, Bilbasen, Kijiji, 2dehands, 2ememain, Vivanuncios, Automobile.it, Motors.co.uk, Autotrader (Australia), Carsguide (Australia), and eBay Kleinanzeigen, and innovating consistently across its product portfolio and advertising technology platform,” added he.
The partnership will significantly strengthen both entities and see them compete more with existing e-commerce businesses like Amazon.com Inc (NASDAQ: AMZN), which is increasing its global touch by the day.
Schibsted ASA, being the majority owner of Adevinta has come out in favor of the transaction.
“Schibsted’s Board of Directors and management strongly supports the agreement between Adevinta and eBay, as we are confident that it will further strengthen the value creation potential for Schibsted and the rest of Adevinta’s shareholders. Schibsted intends to continue to contribute to the value creation for all Adevinta shareholders as a significant long-term anchor shareholder,” said Kristin Skogen Lund, CEO of Schibsted.
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