eBay has sold its classified-ads business to Norway’s Adevinta for $9.2 billion, giving the company a 44% equity stake in the Norwegian classified ads publisher, and netting a 33.3% voting stake. With this move, eBay will gain $2.5 billion in cash upfront, and 540 million Adevinta shares, which now has solid market positions across 20 markets, covering 1 billion people with 3 billion monthly visits.
“We are pleased we reached an agreement with Adevinta that brings together two great companies,” said Jamie Iannone, Chief Executive Officer, eBay Inc. “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.”
eBay has been planning to sell off its classified ads business since February. Initially, firms like TPG, Blackstone Group, Naspers, and Axel Springer SE were also potential buyers, but the company had no luck until Adevinta.
Adevinta is already an established firm and owns Leboncoin, OLX, and many others. The company has a presence in 15 countries with a portfolio that spans 35 digital products and websites. eBay is not stranger to global outreach either, and offers a collection of 12 brands in 13 countries around the world. With the acquisition of eBay Classifieds Group, Adevinta becomes the largest online classifieds company globally, boasting a presence in 20 countries worldwide. The combined entity hopes to achieve $150 million – $185 million in synergies.
“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, impressed with eBay’s catalogue of brands which includes Mobile.de, Gumtree, Marktplaats, dba, Bilbasen, Kijiji, 2dehands, 2ememain, Vivanuncios, Automobile.it, Motors.co.uk, Autotrader (Australia), Carsguide (Australia), and eBay Kleinanzeigen.
The deal is still “subject to regulatory approvals, customary closing conditions, including approval by the affirmative vote of holders of at least two-thirds of the votes cast as well as of the share capital of Adevinta ordinary shares represented in person or by proxy at an extraordinary general meeting of the stockholders of Adevinta, and consultation with competent works councils, other employee representation bodies or employees where and to the extent required by applicable law,” the blog post from eBay read, which speculates that the entire process may take upto 2021 to complete.
The approvals are pouring in across the board, with Schibsted ASA, Adevinta’s majority stake holder, already giving its blessing. The company will acquire eBay Classifieds’ Danish entity and therefore, lead marketplaces in Denmark, DBA.dk and Bilbasen.dk post the deal. “Blommenholm Industrier AS, which holds approximately 6.3% of Adevinta’s ordinary shares, has also agreed to vote in favor of the transaction,” the blog confirms.
Following the completion of the merger, both eBay and Schibsted will be able to appoint two directors to the Adevinta board of directors so long as they hold at least 25% of the Adevinta ordinary shares, and one director so long as they hold at least 10% of the Adevinta ordinary shares. As mentioned above, eBay now has 33.3% voting shares in the company, which exceeds the 25% cap, and thus, the company will be appointing two directors to Adevinta’s board.
This classifieds division was the last non-core eBay business. Activist shareholders Elliott Management Corp and Starboard Value have been pressurizing eBay to sell off all of its non-core businesses to increase profit, and now it finally has.