As eBay Inc. refocuses its mission on consumer-to-consumer and business-to-consumer online sales, the eCommerce company is reportedly selling its classified ads unit.
The Wall Street Journal reports the 25-year old auction and “Buy It Now” website with operations in nearly three dozen countries is close to a deal that would sell its ad division to Adevinta ASA, the Norwegian online marketplace.
Sources told the Journal the cash-and-stock deal, which could be announced as soon as Monday, is estimated to be around $8 billion or more.
In June, PYMNTS reported bids were due in early July for eBay Inc.’s classified advertising business. Private equity companies seeking to win the auction could arrange for as much as $2.6 billion worth of debt to finance the transaction. At the time, those who were taking part in the auction included Adevinta, Prosus NV, and a group composed of Blackstone Group Inc., Hellman & Friedman LLC and Permira.
But Adevinta appears to have bested eCommerce investor Prosus NV and the separate private equity consortium backed by Blackstone Group Inc.
The San Jose, California-based corporation, which has also owns high-profile brands including online ticket sales website StubHub and payments company PayPal, has faced pressure from some investors to shed those firms and any unit that does not support its core mission.
In 2019, it was announced that StubHub would be sold to the competitor Viagogo for $4 billion.
Last year, eBay’s ad sector reported $1.1 billion in revenue, compared with the $7.6 billion its marketplace business generated.
Adevinta manages digital marketplaces in 16 countries, with a significant presence in parts of Europe, South America and Mexico, the newspaper reported.
If the deal is signed, Adevinta would expand its geographic reach. For example, it is not a key player in Germany, one of Europe’s biggest economies, according to the company’s website.
Activist investors have noted eBay’s core marketplace business has suffered amid competition from Amazon.com, the U.S.’s biggest online retailer.
Jamie Iannone, formerly chief operating officer of Walmart Inc.’s eCommerce division, was appointed eBay’s new chief executive earlier this year. Walmart recently overtook eBay’s spot as the U.S.’s second-largest online retailer by share of online sales, according to eMarketer.
But Iannone was hired to boost the company’ growth.
Adevinta completed its second quarter (Q2) of 2020, which ended on June 30, with a revenue decline of 16 percent, compared to Q2 2019.The company blamed the losses on the impact of COVID-19 in all markets.
Selected by Fintech Tube