Adevinta pays $9.2 billion for eBay unit

OSLO/LONDON: US firm eBay Inc has agreed to sell its classified ads business to Norway’s Adevinta ASA in a deal worth $9.2 billion, creating the world’s largest classifieds group.

Under the deal, eBay will receive $2.5 billion in cash and 540 million shares of Adevinta, making it the largest shareholder with a 44% stake and 33.3% of the vote.

“Adevinta becomes the largest online classifieds company globally, with a unique portfolio of leading marketplace brands,” Adevinta chief executive Rolv Erik Ryssdal said.

The combined company will have a presence in 20 markets, with one billion people and three billion visits every month.

A source close to the deal said the Norwegian firm sweetened terms of its bid at the weekend by offering eBay a bigger stake, after the US firm’s board was initially split, with some members backing a $9 billion cash bid by online retailer Prosus.

Jamie Iannone, eBay’s chief executive, backed Adevinta’s proposal and persuaded the board of its merits, the source said.

Ryssdal said the combination “creates one of the most exciting and compelling equity stories in the online classifieds sector.”

Adevinta owns brands such as Leboncoin, France’s biggest online classified ads website, Brazil’s OLX and dozens more across Europe, the Americas and North Africa.

The eBay Classifieds Group includes the Gumtree and Kijiji brands, and offers online ads to more than 1,000 cities around the world. The business posted an operating income of $83 million on revenue of $248 million in the first quarter of 2020.

The transaction, expected to close by the first quarter of 2021, targets $150 million-$185 million in annual savings on earnings before interest, tax, depreciation and amortisation (EBITDA) within three years.