EBay Nears Deal to Sell Classified-Ads Unit to Adevinta -- WSJ

By Ben Dummett, Corrie Driebusch and Cara Lombardo

This article is being republished as part of our daily reproduction of WSJ.com articles that also appeared in the U.S. print edition of The Wall Street Journal (July 20, 2020).

EBay Inc. (EBAY) is in advanced talks to sell its classified-ads business to Norway's Adevinta ASA (ADEVF), according to people familiar with the matter, as the online auction pioneer seeks to refocus on its core marketplace business.

A cash-and-stock deal could be announced as soon as Monday assuming the talks don't fall apart, the people said. The price of the deal couldn't be learned but the eBay (EBAY) unit was expected to sell for roughly $8 billion or more, some of the people said.

San Jose, Calif.-based eBay (EBAY), once a highflying internet conglomerate with brands like PayPal and StubHub, has been unwinding that structure under pressure from activist investors who argued it shrouded eBay's (EBAY) value. The classifieds unit is one of the last remaining businesses outside the core after the company struck a deal to sell its StubHub ticketing division last year.

EBay's (EBAY) classifieds unit primarily operates internationally across Canada, parts of Europe, Africa, Australia and Mexico. Its platforms allow users to post goods and services in their local communities, similar to Craigslist in the U.S. Last year, the division produced $1.1 billion in revenue, compared with the $7.6 billion its marketplace business generated.

EBay (EBAY) has been seeking to sell the unit since around February, when The Wall Street Journal reported that it was up for sale.

Adevinta (ADEVF) oversees digital marketplaces in 16 countries, with a significant presence in parts of Europe, South America and Mexico. By acquiring the eBay (EBAY) business, Adevinta (ADEVF) would significantly expand its presence in Germany, one of Europe's biggest economies, where its current operation doesn't hold a dominant position, according to the company's website.

Adevinta's (ADEVF) bid appears to have beaten out those of a private-equity consortium and of Prosus NV. The deal would be a big bite for Adevinta (ADEVF) -- whose own market value amounts to little more than $8 billion -- as it seeks to expand its customer base and geographic reach. At the same time, eBay (EBAY) would benefit from growth in the combined business by accepting stock as part of the deal.

The deal is a blow for Prosus, which has ambitions to expand its stable of internet businesses through a big acquisition. Earlier this year, the Amsterdam-listed company, which is controlled by South Africa's Naspers Ltd., lost out to Netherlands-based Takeaway.com in a bidding war to acquire Just Eat, a U.K.-based food-delivery company.

EBay's (EBAY) core marketplace business has suffered amid growing competition from Amazon.com, the U.S.'s biggest online retailer.

Elliott Management Corp. and Starboard Value LP have been urging eBay (EBAY) to boost its share price by shedding businesses the hedge funds had considered noncore. The funds received board seats in settlement agreements and the clash prompted Devin Wenig, eBay's (EBAY) former CEO, to leave the company in September over disagreements on strategy. His departure coincided with the firing of six workers, who have since been charged by the Justice Department with leading a cyberstalking campaign against a Massachusetts couple.

In April, eBay (EBAY) appointed Jamie Iannone, formerly chief operating officer of Walmart Inc.'s e-commerce division, as its new chief executive. With Walmart recently overtaking eBay (EBAY) as the U.S.'s second-largest online retailer by share of online sales, according to eMarketer, the company is betting on Mr. Iannone's experience to reignite growth.

Write to Ben Dummett at ben.dummett@wsj.com, Corrie Driebusch at corrie.driebusch@wsj.com and Cara Lombardo at cara.lombardo@wsj.com

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  07-20-20 0247ET
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