Ebay has sold its online classifieds business, which includes its Gumtree platform in the UK, in a $9bn (£7.1bn) deal as it ramps up focus on its core marketplace proposition.
Norwegian rival Adevinta has struck a deal worth £2.5bn (£1.9bn) in cash and 540 million shares, making eBay the largest shareholder in the Oslo-based group with a 44% stake.
The sale will make Adevinta the world’s largest online classified advertising provider, with a presence in 20 countries and revenues of $1.8bn (£1.4bn).
Should the deal go through, it would represent the second change of ownership for Gumtree since 2000. Ebay bought the site, which initially targeted young travellers in London looking for flatshares and second-hand furniture, back in 2005.
But the online marketplace has now disposed of the business following pressure from activist investors Elliott Management and Starboard Value to launch a strategic review.
Back in November, eBay agreed a deal to sell online ticketing platform StubHub to rival Viagogo for $4bn (£3bn). That acquisition is still being pored over by the Competition and Markets Authority (CMA).
Adevinta boss Rolv Erik Ryssdal said the group was on the hunt for further acquisitions after the coronavirus pandemic boosted sales across its digital marketplaces, which include Leboncoin in France and OLX in Brazil.
The purchase of eBay Classifieds Group, which raked in $248m (£195m) in sales during the first quarter of its current financial year, will add the Gumtree and Kijiji platforms to Adevinta’s growing stable of online platforms.
Adevinta said it expects the deal to complete in the first quarter of 2021 and is targeting $185m (£146m) in annual cost savings within three years. The majority of those synergies will come from integrating its IT systems.
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