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

imageStock Markets1 hour ago (Jul 21, 2020 06:35AM ET)


(C) Reuters. The German headquarters of eBay is pictured at Europarc Dreilinden business park south of Berlin in Kleinmachnow


By Nerijus Adomaitis and Pamela Barbaglia

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

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, 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 $1.8 billion and earnings before interest, tax, depreciation and amortisation (EBITDA) close to $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 $9 billion cash bid by online retailer Prosus (OTC:PROSF).

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.”

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


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 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 33% from 59%, but it would have 39.5% 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 acquistions.

“We will have a larger liquidity and financial flexbility, 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 $330 million, reducing the cash consideration from Adevinta to about $2.17 billion.

Citigroup (NYSE:C) advised Adevinta, while Barclays (LON:BARC) acted as lead financial advisor to Schibsted. Goldman Sachs (NYSE:GS) and LionTree advised eBay.

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

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