Famous American e-commerce corporation eBay made the decision to sell its classified ads business to Norwegian group Adevinta. Importantly, Adevinta will pay $9.2 billion for eBay’s classified ads business, creating the world’s largest classified ads group.
It is worth mentioning that eBay will receive $2.5 billion in cash as well as 540 million shares of Adevinta. Consequently, eBay will become the largest shareholder, with a 44% stake in the pro forma company.
According to Adevinta’s CEO Rolv Erik Ryssdal, Adevinta will become the largest online classifieds company in the world. The company has a unique portfolio of leading marketplace brands. It is worth noting that Adevinta will have a market presence in 20 countries, covering one billion people with three billion visits every month.
Moreover, the combination of the two companies, with their complementary businesses, will create one of the most interesting equity stories in the online classifieds sector.
The companies made this announcement on July 21. Interestingly, Adevinta’s shares benefited from this news. Of note are the brands this Norwegian group owns, such as Leboncoin. As a reminder, Leboncoin is the biggest online classified ads website in France. Also, Adevinta owns Brazil’s OLX, as well as dozens more across Europe, the Americas, and North Africa.
At the same time, eBay Classifieds Group includes the Gumtree and Kijiji brands and offers online ads to more than 1,000 cities in different parts of the world. People should take into consideration that eBay Classifieds Group posted an operating income of $83 million on revenue of $248 million in the first quarter of this year.
Importantly, the transaction is expected to close by the first quarter of 2021. The target is to reach $150-185 million in annual synergies within three years. Nordic media company Schibsted owns 59% of Adevinta. However, Schibsted’s stake in Adevinta is going to fall from the current 59% to about 33%.
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