Ebay sells classifieds business to Norway's Adevinta in $9.2 bln deal
OSLO: Ebay has agreed to sell its classified ads business to Norwegian group Adevinta in a cash share deal worth $9.2 billion, the companies said on Tuesday.
Ebay will receive $2.5 billion in cash and 540 million shares of Adevinta, making it the largest shareholder with a 44% stake of the pro forma company, they said.
The transaction is expected to close by the first quarter of 2021.
What the deal means
The deal will combine eBay's classified advertising business with Norway’s Adevinta. Industry observers say the deal would give the US retail giant a significant stake in the European group.
The decision to combine eBay’s classified business with Adevinta, a former unit of Norwegian publishing group Schibsted, also ends a multi-month auction launched after activists pressured eBay to slim down its business.
The eBay classifieds business includes Gumtree and Canada’s Kijiji, along with vehicle marketplaces in Denmark, Germany, Italy and the UK, such as motors.co.uk.
The selection of Adevinta came after a series of board meetings on Friday and Saturday in which eBay chief executive Jamie Iannone convinced the US company’s directors that it should retain exposure to the classifieds unit.
The proposal included a significant stock component that made its offer stand out against rival bidders. Those bidders — which included Hellman & Friedman and Blackstone, as well as a separate bid from Prosus, the Dutch-listed arm of South Africa’s Naspers — offered mostly cash to eBay for the unit, other people in the auction told the Financial Times.
Merger, not outright sale
By merging rather than selling the unit, eBay would also be able to save on taxes that would have otherwise been due from a disposal.
Adevinta was spun-off from Schibsted in April 2019 and currently has a market capitalisation of NKr79bn ($8.5bn). Schibsted owns about 60 per cent of the company before any dilution that will result from the eBay deal, according to a Financial Times report.