EBay, Adevinta to Offload Assets to Salvage $9.2 Billion Deal
EBay, Adevinta to Offload Assets to Salvage $9.2 Billion Deal
(Bloomberg) -- EBay Inc. and Adevinta ASA have offered to sell off part of their classified ads business in the U.K. to try to clear Europe’s biggest new hurdle to technology deals.
EBay has offered to divest its U.K. Gumtree business, one of the country’s largest websites for free ads, as well as its Motors.co.uk site, to ease approval of its $9.2 billion deal. Adevinta is pledging to shed its Shpock app in the country. The companies’ U.K. operations are relatively small and would account for just 5% of the combined businesses’ revenue, EBay said.
The U.K.’s Competition and Markets Authority will make a decision on whether those asset sales are enough to secure its approval by April 29, with the potential to postpone the decision until June 28, the regulator said on Tuesday.
The U.K. is proving to be a tough forum for global merger approval after becoming an independent jurisdiction with the country’s exit from the European Union. One deal this year has already been ditched after the CMA opposed it, and the authority’s chief has warned that he’s skeptical about Google’s offer to the EU to win approval for its takeover of health tracker Fitbit Inc.
EBay said in a separate statement that it expects to close the classifieds unit sale in the second quarter. The deal, Norway’s biggest in more than a decade, will significantly boost the size of Adevinta, which was spun off from Scandinavian media conglomerate Schibsted ASA last year. Adevinta’s Chief Executive Officer Rolv Erik Ryssdal has said he’s already planning to acquire more assets.
Germany gave unconditional merger approval last year, citing Shpock’s very low sales and market share.
Technology deals are becoming a focus for the U.K. where officials have voiced regret about approving past takeovers that gave industry giants more power over the market, such as Facebook Inc.’s purchase of Instagram. This year, the authority has said it will investigate Nvidia Corp.’s $40 billion bid for Arm Ltd. It’s also investigating Facebook’s takeover of Giphy Inc. and only cleared Amazon.com Inc.’s purchase of a stake in Deliveroo after a lengthy probe.
Advertising is a priority for the CMA, which is also examining whether a Google privacy initiative will hurt publishers’ ability to generate revenue.
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