EBay’s $9.2 Billion Unit Sale to Adevinta Hits U.K. Hurdle
(Bloomberg) -- EBay Inc.’s sale of its online classifieds business to Adevinta ASA has hit a hurdle, as U.K. regulators voice concerns over the potential threat to competition that the tie-up poses.
The U.K. Competition and Markets Authority told the companies to propose remedies that address antitrust concerns for the deal, which was valued at $9.2 billion when it was announced last year. The regulator has consistently promised a tough stance on tech mergers following the U.K.’s exit from the European Union.
“While Adevinta and EBay do not agree with the CMA’s reasoning, they will work constructively with the CMA and are confident in finding a suitable resolution,” Oslo-based Adevinta said in a statement Tuesday. The companies are working closely with the regulator “to achieve the best outcome,” Ebay said in a separate statement.
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. Rolv Erik Ryssdal, Adevinta’s chief executive officer, said in July he was looking ahead to his next deal even before the Ebay deal was approved.
Adevinta and EBay are considering a sale of assets including online marketplace Shpock to address competition concerns, according to people familiar with the matter who asked not to be identified because discussions are private. The shopping app is used in the U.K., Germany and Austria.
The companies plan to “propose legally binding solutions to resolve the CMA’s competition concerns” before a Feb. 23 deadline, Adevinta said. Both firms declined to comment on specific assets.
The CMA will then have five working days to consider whether to accept the solutions, or to refer the deal to an in-depth investigation. Adevinta said it will provide an update in early March.
The CMA said that the deal would give EBay a 33.3% voting stake in Adevinta and positions on the Adevinta board. That would mean the California-based company would be able “participate in the management of Adevinta and could enable it to influence the business strategy” of brands including Gumtree and Shpock.
Germany’s Federal Cartel Office cleared the deal last year, saying it “will not significantly impede competition” because Shpock had very low sales and market share in the country.
The U.K.’s antitrust regulator has taken a keen interest in online advertising, with a July report warning about the power of Google and Facebook Inc. over ad sales in the country.
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