Adevinta wins auction to buy eBay's classified ads unit for nearly US$9b

[NEW YORK] Norwegian group Adevinta has won the auction to buy US e-commerce firm eBay's classified-ads unit for nearly US$9 billion, a source familiar with the matter told Reuters on Monday.

EBay intends to keep a minority stake in the business following the close of the deal, the source said.

The deal comes at a time when the coronavirus pandemic has boosted demand for online market places as consumers turned to online shopping due to prolonged lockdowns and social distancing measures in most countries.

Activist investors Elliott Management Corp and Starboard Value had been pushing eBay to sell the unit and also its ticket sales business, since last January, as part of a plan that could double the company's value.

Ebay's classified business includes brands such as Gumtree and Kijiji and offers online ads to more than 1,000 cities around the world. The unit posted an operating income of US$83 million and revenue of US$248 million in the first quarter of 2020.

The eBay deal could help Adevinta double in size. Adevinta's market capitalisation at Friday's closing was US$8.5 billion. Trading in the company's shares on the Oslo bourse was suspended earlier on Monday in anticipation of an announcement.

Last week, Reuters reported the US e-commerce giant had received offers for the classified-ads unit from online retailer Prosus, a private equity consortium, and Adevinta.

Adevinta, a spin-off from Nordic media company Schibsted, owns brands such as Leboncoin, France's biggest online classified ads website, Brazil's OLX and dozens more across Europe, the Americas and North Africa.

EBay did not immediately respond to a Reuters request for comment, while a spokesman for Adevinta declined to comment. 

REUTERS