Shares of Adevinta ASA gained around 39 percent after the Norway-based online classifieds specialist agreed to acquire the Classifieds business of eBay Inc. in $9.2 billion cash and stock deal. The transaction, which would create the world’s largest online classifieds company, will also make eBay the largest shareholder of Adevinta.
Shares of Schibsted ASA, which owns majority of Adevinta, also gained around 23 percent, while eBAY shares in pre-market activity on Nasdaq were gaining 2.15 percent.
In the deal, eBay will receive $2.5 billion of cash and 540 million shares of Adevinta, representing 44 percent ownership of the pro forma company and around 33.3 percent voting stake.
The sale is subject to regulatory approvals, customary closing conditions, including approval by stockholders of Adevinta, among others. Schibsted as well as Blommenholm Industrier AS, which holds around 6.3 percent of Adevinta’s stake, have agreed to vote in favor of the transaction.
The deal is expected to close by the first quarter of 2021.
Once the transaction between eBay and Adevinta closes, Schibsted would acquire eBay Classifieds’ Danish entity and therefore marketplaces in Denmark, DBA.dk and Bilbasen.dk.
Following the deal closing, each of eBay and Schibsted will designate two directors to the Adevinta board of directors so long as it holds at least 25 percent stake, and one director so long as it holds at least 10 percent.
Both Adevinta and eBay will continue to partner in key areas. The transaction is expected to create estimated annual synergies of $150 million to $185 million within the next three years.
The combined company is expected to have solid market positions across 20 markets, covering 1 billion people with 3 billion monthly visits. Adevinta is currently operating in 15 countries, with a portfolio of 35 digital products and websites. Further, eBay’s Classifieds platforms include a collection of 12 brands in 13 countries.
Jamie Iannone, Chief Executive Officer,EBAY, said, “This sale creates short-term and long-term value for shareholders and customers, while allowing us to participate in the future potential of the Classifieds business.”
In the transaction, Goldman Sachs & Co. LLC and LionTree Advisors LLC are acting as financial advisors to eBay.
Adevinta shares were trading at 15.31 euros, up 38.80 percent, and Schibsted shares were trading at 29.22 euros, up 22.88 percent.
In pre-market activity on Nasdaq, eBAY shares were gaining 2.15 percent to trade at $59.73.
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