Leboncoin’s parent company buys eBay for 8 billion euros

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The Norwegian online ad specialist Adevinta, parent company of Leboncoin, announced on Tuesday, July 21, the repurchase of the assets of the American giant eBay in this field for nearly 9.2 billion dollars, or 8 billion euros, claiming the birth of the world number one in the sector.

To take control of eBay Classified Groups, which notably includes the Gumtree and Kijiji sites, Adevinta will pay eBay $ 2.5 billion in cash and 540 million shares corresponding to 44% of its capital, the company announced. Norwegian in a statement.

“With the acquisition of eBay Classifieds Group, Adevinta becomes the largest online classifieds company in the world, with a unique portfolio of major market brands” online, argued group CEO Rolv Erik Ryssdal. The health crisis triggered by the new coronavirus has accelerated the migration of consumers to online shopping as stores in many countries have had to draw back the curtain temporarily, if not permanently.

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Combined revenue of $ 1.8 billion

Together, according to Adevinta, the two groups will be leaders in 20 countries. In 2019, their combined revenue was $ 1.8 billion – significantly more than their immediate pursuers, Axel Springer Classifieds (1.33 billion) and Prosus Classifieds (1.28 billion) – and their gross profit of operating (EBITDA) close to $ 600 million. The expected synergies from the buyout are between 150 and 185 million dollars in EBITDA after three years. Figures deemed ambitious by analysts.

Thanks to the significant liquidity generated by its activities, Adevinta says it wants to continue to grow. “I am sure that we will seize the opportunities to further consolidate the sector in the years to come, but we are there in the medium term”, explained Mr. Ryssdal.

Born last year from a split with the media group Schibsted, which until now remained its majority shareholder with around 59% of the capital, Adevinta is already present in 15 countries in Europe – with its Leboncoin nugget in France -, in Latin America and North Africa. If its stake will drop to 33% of the ordinary shares after the transaction, Schibsted will remain the main master on board, at least initially, with around 39.5% of the voting rights while those of eBay will be capped at 33.3%.

Half of Adevinta’s turnover in France

“This sale creates short and long term value for shareholders and customers while allowing us to reap the future potential of the Classified Ads business”, said eBay CEO Jamie Iannone. The deal is due to close by the first quarter of 2021. It was greeted with enthusiasm at the Oslo Stock Exchange, where Adevinta and Schibsted shares jumped 37% and 20% respectively at midday, after being suspended for more than twenty-four hours pending announcement. On the other side of the Atlantic, the eBay title had closed up 0.58% on Monday.

France, where it owns Leboncoin and L’Argus, among others, currently accounts for around half of Adevinta’s overall turnover and most of its profits. Besides Gumtree and Kijiji, eBay’s branch of online ads includes sites like Mobile.de, Marktplaats, dba, Bilbasen, 2dehands, 2ememain, Vivanuncios, Automobile.it, Motors.co.uk, Autotrader and Carsguide in Australia , or eBay Kleinanzeigen.

According to several Anglo-Saxon media, Prosus and a consortium including in particular the Blackstone and Hellman & Friedman funds were also in the running for the takeover. Schibsted directly takes over eBay’s classifieds business in Denmark for $ 330 million, reducing Adevinta’s cash expenditure to $ 2.17 billion.

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The World with AFP

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https://www.lemonde.fr/economie/article/2020/07/21/la-maison-mere-de-leboncoin-rachete-ebay-pour-8-milliards-d-euros_6046845_3234.html

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