eBay completes transfer of eBay Classifieds to Adevinta

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eBay have announced that it has completed the transfer of its eBay Classifieds business to Adevinta in exchange for $2.5 billion in cash and a 44% equity stake in Adevinta, equivalent to approximately 540 million shares. This news comes just weeks after the UK’s Competition and Markets Authority approved Norway’s Adevinta acquisition of eBay Classifieds.

eBay had been trying to complete a $9.2B deal to sell the eBay Classifieds business to Adevinta, but the UK Competition and Markets Authority (CMA) got involved and didn’t like the potential reduction in competition for the UK market. 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.

“We are pleased to finalize the deal between Adevinta and eBay Classifieds, where the combination of these two companies will create a leading global online classifieds business. By joining Adevinta, the eBay Classifieds’ business has an enormous opportunity ahead. We are optimistic that the breadth of talent and collective experience across the combined portfolio will offer additional value for our customers, employees and shareholders.”
– Jamie Iannone, Chief Executive Officer, eBay

The completion of this transaction results in after tax net cash proceeds of approximately $2 billion. With this transfer complete, the Company is updating its capital allocation plans for 2021 by increasing its estimated share buyback from $2.0 billion to $5.0 billion.

The Company has agreed to reduce its ownership stake in Adevinta to 33% or less over the next 18 months, as part of remedies it proposed to resolve the competition concerns raised by the Austrian regulatory authorities. Proceeds from this reduction will be deployed in a manner consistent with eBay’s capital allocation tenets and targets.

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