Ebay’s $9.2 billion tie-up with Shpock-owner Adevinta has been approved by the UK’s competition authority after months of investigation.
The Competition and Markets Authority (CMA) has given the go-ahead for the deal which will see the creation of the world’s largest online classifieds ads company.
The complex deal began in July when Adevinta agreed to purchase Ebay’s classified ads business, beating rivals including Naspers and Prosus despite them offering more cash.
Instead Adevinta agreed to sell a significant stake of its business to Ebay, making it the Norwegian company’s largest shareholder with an overall 44 per cent share and effectively turning the sale into a merger.
The CMA considered this an issue as it would give Ebay major influence over Adevinta, meaning only Facebook’s Marketplace could be considered a competitor, significantly diminishing competition in the sector.
In February, the competition watchdog said the deal would “reduce consumer choice, increase fees or lower innovation in the supply of platforms that allow people to buy and sell goods online”.
In response both Ebay and Adevinta announced plans to sell of some of their businesses a month later, in order to “remedy” the CMA’s concerns.
Ebay will now sell of its UK Gumtree business, including its Motors.co.uk car resale platform, while Adevinta will offload its Shpock marketplace.
The CMA said this morning that it “considers that the undertakings given . . . by Adevinta and Ebay are appropriate to remedy, mitigate or prevent the substantial lessening of competition, or any adverse effect which may be expected to result from the transaction.”
The deal will see the formation of the largest classified ads business on earth, spanning 20 countries and achieving revenues of around $1.8 billion last year, including an operating profit of $600 million.