Ebay agrees to sell $2.25 billion stake in Adevinta to push through merger

Ebay has agreed to sell over $2 billion worth of stock in Shpock-owner Adevinta to help push through regulatory approval to combine its classified ads business.

Ebay’s complex tie-up with Norway’s ecommerce giant Adevinta could have an end in sight as it has agreed to sell a 10 per cent stake worth $2.25 billion to private equity firm Permira, clearing its final regulatory hurdle.

The sale is designed to appease Austria’s Federal Competition Authority, which has demanded that Ebay reduce its stake in Adevinta to no more than 33 per cent in order to avoid reducing competition in the sector.

Ebay’s offloading of 125 million shares will reduce its holding to 34 per cent, and Permira will be offers the chance to purchase an additional 10 million shares reducing its stake to the required 33 per cent.

“The transaction announced today with Permira provides a clear path to satisfying this commitment, while delivering value to eBay shareholders,” Ebay said.

The intricate deal, which will create the world’s largest online classified ads business, began in July 2020 when Adevinta agreed to purchase Ebay’s classified ads business, beating rivals including Naspers and Prosus despite them offering more cash.

READ MORE: Ebay’s $9.2bn merger with Adevinta approved by UK watchdog

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 UK’s Competition and Markets Authority (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.

Earlier last month, the CMA gave the final go ahead for the tie-up after the pair agreed to sell of respective businesses, including Ebay’s Gumtree and Adevinta’s Shpock to “remedy” concerns.

The CMA said last month 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.”

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