eBay Inc., the renowned American multinational e-commerce firm, has reportedly announced that it has agreed to sell the company’s classified ads business unit to Norway-based marketplace specialist group, Adevinta.
The Norwegian company would be acquiring the classified ads unit under a comprehensive acquisition agreement worth approximately $9.2 billion. According to the both the involved parties, the deal would create the biggest classifieds group in the world.
Under the terms of the agreement, eBay would receive a total sum of $2.5 billion in cash along with 40 million Adevinta shares, making the company the biggest shareholder with a stake of approximately 44% in the pro forma enterprise.
Rolv Erik Ryssdal, Adevinta CEO, stated that through the acquisition Adevinta would become the biggest online classifieds firm across the globe, with a number of leading marketplace brands within its unique portfolio.
Ryssdal further added that the company believes that the merger of the two enterprises, considering their complementary businesses, would create one of the world’s most compelling and exciting equity stories within the online classifieds industry.
The firm would have a prominent market presence across 20 different countries, covering more than one billion individuals with more than three billion visits on a monthly basis.
Adevinta was formed out of renowned Nordic media enterprise, Schibsted, and was listed on Oslo bourse in 2019. The company owns brands like Brazil's OLX, France's largest online classified advertisements website Leboncoin, and several others across Europe, North Africa, and the Americas.
Company shares jumped more than 39% following the announcement, after the trading, that was previously halted, resumed. Meanwhile, Schibsted shares jumped up approximately 21%.
eBay Classifieds Group contains brands like Kijiji and Gumtree, and provides online ads to over 1,000 cities throughout the world. The company’s business unit recorded an operating income of more than $83 million on $248 million worth of revenue within the first quarter (Q1) of 2020.
The deal, which is projected to reach completion by the first quarter (Q1) of 2021, would target $150 to $185 million through annual synergies over a period of three years.