Business

eBay likely to sell its classified-ads unit to Adevinta

eBay likely to sell its classified-ads unit to Adevinta - Appy Pie

eBay is likely  nearing a deal to promote its classified-ads enterprise to Adevinta. Adevinta is a Norwegian firm that runs online marketplaces throughout Europe and Latin America. As per the sources, with the transaction, eBay is expected to sell the unit for a whopping amount of about USD 8 billion.

Initially in February market reports suggested that eBay was planning to sell its classifieds-ads business, to prospective buyers – TPG and Blackstone Group, Naspers, and German publisher Axel Springer SE.

In May, reports said that KKR & Co.backed publishing company Axel Springer had put forward an initial bid to buy the eBay unit.

eBay’s classifieds division operates mostly outside of the US, including in Canada, Europe, Africa, Australia, and Mexico. If Adevinta ends up acquiring eBay’s classifieds business, it will be able to expand its international portfolio of e-commerce platforms.

An Adevinta representative said the company has nothing to comment on the reported negotiations.

eBay’s classified business has certain brand names like Gumtree and Kijiji associated with it and offers the option to advertise online in over 1,000 cities around the globe.

eBay had reportedly been planning to sell the unit for about a year now, and it was noted in February that the company could possibly spin it off or go into a joint operation with another firm, or sell it.

Activist shareholders Elliot Management and Starboard Value LP have been pushing eBay to sell off non-core business units to focus on its marketplace

eBay in April, while issuing its last quarterly earnings report, had said that it was exploring potential value-creating alternatives for its Classifieds business. It had also said that the company is into active discussions with multiple other companies and it is anticipating having some update by the middle of the year.

During the first quarter of this year, eBay’s fundamental marketplace business generated USD 2.1 billion in revenue, down, whereas its classifieds business saw USD 248 million in revenue. In 2019, the classifieds business made USD 1.1 billion in revenue, versus USD 7.6 billion for eBay Marketplace, which is big competition from larger online rivals like Amazon. eBay Q1 shows gross sales of USD 2.374B, energetic consumers as much as 174 million in due to COVID-19 pandemic.