eBay have been trying to complete a $9.2B deal to sell the eBay Classifieds business to Adevinta, but the UK’s UK Competition and Markets Authority (CMA) got involved and didn’t like the potential reduction in competition for the UK market. They pointed out that with eBay gaining a 33.3% voting stake in Adevinta and positions on the Adevinta board, they would be able to participate in the management of Adevinta and could influence the business strategy for both Gumtree, motors.co.uk and Shpock.
According to The CMA the transaction between eBay and Adevinta could pose a risk to competition in the UK due to higher prices and less choice for consumers. It’s a bit strange really as eBay already own Gumtree and motors.co.uk and the deal will give them less control. It’s only getting an interest in Shpock that would be different.
A solution has been found, flog the UK assets to someone else – eBay and Adevinta have proposed the divestment of each company’s primary classifieds operations in the UK: Shpock, Gumtree (UK) and Motors.co.uk. The CMA has announced that it considers there are reasonable grounds to believe the remedies presented by eBay and Adevinta address their concerns with respect to the proposed transaction between eBay and Adevinta. In other words the deal can go ahead.
In 2019, eBay Classifieds business in the UK accounted for less than 10% of its consolidated revenues and Adevinta’s UK business accounted for only 1% of its consolidated revenues. On a combined basis, the UK would represent less than 5% of total consolidated revenues.
eBay and Adevinta remain excited about the proposed combination of Adevinta and eBay Classifieds Group and now target closing the transaction in Q2 2021, subject to final ratification of the remedies execution plan by the CMA and receipt of outstanding regulatory approval in Austria.
So…. anyone got a few quid in the bank? Fancy buying Shpock, Gumtree or motors.co.uk and pitting yourself against the likes of Facebook, who are the only remaining player of scale in the UK.