eBay sold its Classifieds business to Adevinta for $2.5 billion in cash and a 44% equity stake, but eBay will reduce its ownership to 33% (or less) over the next 18 months to resolve competition concerns raised by Austrian regulatory authorities.
eBay CEO Jamie Iannone called the deal an amazing opportunity for both of the companies to “combine the talent and skill needed to create a best-in-class global online classifieds business.”
What will eBay do with the after-tax net proceeds of $2 billion? Buy back more shares, which companies do to “boost the value of the stock and to improve the financial statements,” according to Investopedia.
eBay is increasing its estimated share buyback from $2 billion to $5 billion, it disclosed in Friday’s press release.
“By joining Adevinta, the eBay Classifieds’ business has an enormous opportunity ahead,” Iannone said. “We are optimistic that the breadth of talent and collective experience across the combined portfolio will offer additional value for our customers, employees and shareholders.”
Here is more information about Adevinta from the press release:
“Adevinta is a global online classifieds specialist, operating digital marketplaces in 16 countries. The company provides technology-based services to connect buyers with sellers and to facilitate transactions, from job offers to real estate, cars, consumer goods and more.
“Adevinta’s portfolio spans more than 40 digital brands, covering one billion people and attracting approximately three billion average monthly visits. Leading brands include top-ranked leboncoin in France, Germany’s leading classifieds sites mobile.de and eBay Kleinanzeigen, Marktplaats in the Netherlands, Kijiji in Canada, fotocasa and InfoJobs in Spain, and 50% of fast-growing OLX Brasil. Adevinta spun off from Schibsted ASA and publicly listed in Oslo, Norway in 2019. Adevinta employs 6,300 people committed to supporting users and customers daily.”