The Takeaways:
- eBay announced the deal which is valued at $9.2 billion. It includes eBay getting $2.5 billion in cash and 540 million Adevinta shares. The deal makes eBay a 44% owner of Adevinta, with a 33.3% voting stake.
- The deal will result in a combined classified ad footprint of 20 countries. The companies believe that some $150 million – $185 million in synergies will be reached through the combination.
- “With the acquisition of eBay Classifieds Group, Adevinta becomes the largest online classifieds company globally, with a unique portfolio of leading marketplace brands. We believe the combination of the two companies, with their complementary businesses, creates one of the most exciting and compelling equity stories in the online classifieds sector,” said Rolv Erik Ryssdal, CEO of Adevinta, in a statement.
What Happened?
The decision to combine eBay’s classified business with Adevinta comes after many months of auction as a result of activist investors pressuring eBay to cut down its business empire.
The classifieds business has been hard-hit by the coronavirus crisis. In the last quarter, eBay said that classifieds brought in revenues of just $248 million, down 3% on an as-reported basis. The marketplace brought in revenues of $1.9 billion in the same period the previous year.
Ebay classified businesses includes Gumtree and Canada’s Kijiji, along with vehicle marketplaces in Denmark, Germany, Italy and the UK, such as motors.co.uk.
What’s Left of eBay?
Ebay’s core marketplace business has benefited from coronavirus lockdown conditions, but it is struggling to keep up with competitors. Its market share growth has weakened behind Target, Walmart, Best Buy and Amazon.com Inc., the U.S.’s biggest online retailer.
