Adevinta wins auction to buy eBay's classified ads unit for nearly $9 billion: source
Reuters
Published Jul 20, 2020 01:56AM ET
Updated Jul 20, 2020 09:51AM ET
By Greg Roumeliotis
(Reuters) - Norway's Adevinta has won the auction to buy U.S. e-commerce firm eBay (NASDAQ:EBAY)'s classified ads unit for nearly $9 billion, a source familiar with the matter told Reuters on Monday.
EBay intends to keep a minority stake in the business following the close of the deal, the source said.
The acquisition comes as the coronavirus crisis boosts demand for online market places, with consumers turning to online shopping due to prolonged lockdowns and social distancing measures in most countries.
Activist investors Elliott Management Corp and Starboard Value had been pushing eBay to sell the unit and also its ticket sales business since last January, as part of a plan that could double the company's value.
"There is a relevant geographic overlap between the two businesses - for example in Germany, Italy, and the UK - but we think the acquisition could also be attractive to reinforce Adevinta's position as a pan-European online classifieds player," Deutsche Bank (DE:DBKGn) said in a note.
Ebay's classified business includes brands such as Gumtree and Kijiji and offers online ads to more than 1,000 cities around the world. The unit posted operating income of $83 million and revenue of $248 million in the first quarter of 2020.
The eBay deal could help Adevinta double in size. Adevinta's market capitalization at Friday's closing was 79 billion crowns ($8.5 billion). Trading in the company's shares on the Oslo bourse was suspended earlier on Monday in anticipation of an announcement.
Adevinta owns brands such as Leboncoin, France's biggest online classified ads website, Brazil's OLX and dozens more across Europe, the Americas and North Africa.
It was spun off from Nordic media company Schibsted and listed on the Oslo bourse in 2019 with the express purpose of growing the business in the online classifieds sector and making acquisitions.
Last week, Reuters reported the U.S. e-commerce giant had received offers for the classified ads unit from online retailer Prosus (OTC:PROSF), a private equity consortium, and Adevinta.
EBay did not immediately respond to a Reuters request for comment, while a spokesman for Adevinta declined to comment.
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Written By: Reuters
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