In a deal with a $9.2 billion price tag, eBay has sold its classifieds business to Adevinta ASA , with the pay out consisting of $2.5 billion in cash and approximately 540 million Adevinta shares.
eBay will acquire an equity stake in Adevinta of about 44%, gaining a third of that company’s voting stake.
Adevinta, based in Oslo, Norway, is a global online classifieds specialist, currently operating in 15 countries, with a portfolio that includes 35 digital products and websites. eBay’s classifieds platforms include 12 brands in 13 countries. The combined business will have a presence in 20 countries. eBay will become the largest Adevinta shareholder, and the companies will continue to partner in key areas post-closing to ensure a seamless transition, they stated, adding that they expect the scale provided by the partnership to create estimated annual synergies of $150 to $185 million over the next three years.
The sale is subject to regulatory and shareholder approvals and customary closing conditions. The parties expect the transaction to close by the first quarter of 2021.
eBay has been pressured by activist investors to reconfigure the company. eBay sold its StubHub business to Viagogo in November of last year for $4.05 billion.
Moringstar analyst R.J. Hottovy, in a research note, characterized the transaction as a positive development, putting eBay classifieds in the hands of experienced global operators with strength in Central Europe. Hottovy added that, although he regards cross-selling opportunities between eBay’s core and classifieds marketplaces as limited, the deal allows eBay to participate in the growth of the global online classifieds market. He expects online classifieds to grow at about a 10% CAGR over the next five years, with near-term acceleration arising from COVID-19-related and other macro factors. The deal also allows eBay to better focus on its core marketplace, which has seen an uptick during the coronavirus crisis.
“We are pleased we reached an agreement with Adevinta that brings together two great companies,” said Jamie Iannone, eBay CEO. “eBay believes strongly in the power of community and connections between people, which has been essential to our classifieds businesses globally. This sale creates short-term and long-term value for shareholders and customers, while allowing us to participate in the future potential of the classifieds business.”