eBay’s sale of its eBay Classifieds Group to Norway’s Adevinta ASA is under threat from the British government’s Competition and Markets Authority (CMA) after the watchdog initiated an investigation into the proposed merger of the eBay Classifieds Group into Adevinta.
“Adevinta ASA is active in the UK through its online classified advertising platforms Shpock, Agriaffaires, MachineryZone and Truckscorner. eBay Classifieds Group is active in the UK through its online classified advertising platforms, Gumtree and Motors.co.uk. In addition to eBay Classifieds Group, eBay Inc. is the owner of eBay Marketplace.”CMA Statement
In the summer, eBay announced it had agreed to sell its Classifieds Group to Adevinta ASA for a total considered value of $9.2 billion. The deal included cash and stock with eBay receiving $2.5 billion in cash and approximately 540 million of Adevinta shares. After the sale completed, eBay was going to become the largest shareholder in Adeventia with about 44 percent of the outstanding shares. But with this investigation by the CMA, the deal could potentially unravel or require significant changes.
Second Major eBay Sale That Faces Scrutiny by CMA
The CMA also investigated the sale of StubHub to Viagago (Pug LLC) and provisionally found that the completed merger between the two companies could reduce competition. In November, Pug LLC filed a Notice of Possible Remedies in response to the CMA’s provisional finding, effectively challenging most of the raised issues.
eBay had sold StubHub in November 2019 and while the CMA announced its investigation into the StubHub/Viagago merger before the sale closed, the watchdog allowed the sale to complete.
However, the merger inquiry into the eBay Classifieds Group’s sale to Adevinta ASA does not include specific language that the sale could be closed, presumably meaning the sale is on hold until the investigation by the CMA is completed.
The CMA has set February 16, 2021 as its deadline to announce its decision whether to refer the merger for a Phase 2 investigation. The watchdog did warn the deadline “may change during the merger assessment process due to different reasons.”
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