Adevinta buys eBay’s classifieds unit in US$9.2 billion deal

U.S. firm eBay Inc has agreed to sell its classified ads business to Norway’s Adevinta in a deal worth US$9.2 billion, creating the world’s largest classifieds group, the companies said on Tuesday.

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

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

“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 countries, with Europe its biggest market. It will have an estimated revenue of US$1.8 billion and earnings before interest, tax, depreciation and amortisation (EBITDA) close to US$600 million.

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 U.S. firm’s board was initially split, with some members backing a US$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 told Reuters the coronavirus crisis had boosted digital marketplaces, with some Adevinta sites receiving more traffic in June than a year earlier, rebounding from a sharp drop in March.

Ryssdal, who said he intended to stay in the chief executive role, said Adevinta would look for more acquisitions after completing the eBay deal, adding the combined company “would be a great platform to do that.”

Shares in Adevinta, which was spun out of Nordic media company Schibsted and listed on the Oslo bourse last year, jumped almost 40per cent after trading resumed. Schibsted shares climbed about 20per cent.


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 US$83 million on revenue of US$248 million in the first quarter of 2020.

The transaction, expected to close by the first quarter of 2021, targets US$150 million-US$185 million in annual savings on EBITDA within three years.

Most of the synergies are expected to come from IT, where eBay is much stronger, a person familiar with the deal said.

Schibsted said the deal meant its stake in Adevinta would fall to about 33per cent from 59per cent, but it would have 39.5per cent of votes.

Schibsted and eBay will appoint two directors each to the expanded board of nine, Adevinta’s investor presentation showed.

Schibsted Chief Executive Kristin Skogen Lund told a presentation her firm intended to remain a significant shareholder in Adevinta but might sell part of its stake if it made further acquisitions.

“We will have a larger liquidity and financial flexibility, but that doesn’t mean that we have any immediate plans (to sell),” she said.

As part of Adevinta deal, the U.S. firm agreed to sell Schibsted the Danish assets of eBay classifieds group for US$330 million, reducing the cash consideration from Adevinta to about US$2.17 billion.

Citigroup advised Adevinta, while Barclays acted as lead financial advisor to Schibsted. Goldman Sachs and LionTree advised eBay.

Z24 News

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