Ebay is close to selling its classified ads business to Norwegian company Adevinta in a deal valuing the arm at around $8 billion.
According to the Wall Street Journal, Ebay and Adevinta could finalise a cash and stock deal today, following months of pressure form activist investor Elliot Management to offload its classifieds arm and focus on its core marketplace business.
The deal would reportedly see Ebay’s classified ads business combine with Adevinta, seeing Ebay take a significant stake in the Norwegian company.
While other companies including TPG, Blackstone Group, Naspers, and German publisher Axel Springer are all understood to have been bidders, Adevinta’s offering of a significant stock component it thought to have seen it pull ahead of its rivals.
The transaction is understood to value Ebay’s classified ads business at around $8 billion, after posting sales of $248 million in the first quarter of this year.
This comes amid increasing pressure from activist investor groups Elliott Management and Starboard Value, which purchased a stake in Ebay and introduced members to its board in early 2019, to make changes in the face of growing competition from the likes of Amazon and Walmart.
In March Ebay conceded and launched an in-depth strategic review of its business, with the pair pushing it to offload its ticket sale business StubHub and its classified-ads business and focus on its core marketplace offering.
This culminated in the shock departure of its chief executive David Wenig in September who said it was clear he was “not on the same page as my new board”, and the $4 billion (£3.15 billion) sales of StubHub to rival Viagogo in November.