Authorities in the United Kingdom appear to have been placated by Adevinta and eBay’s proposed solution to competition concerns which were made public two weeks ago. According to a press release from Adevinta this morning:
“the UK Competition and Markets Authority (CMA) has announced that it considers there are reasonable grounds to believe that the remedies presented by Adevinta and eBay address their concerns in respect of Adevinta’s proposed acquisition of eBay Classifieds Group.”
The CMA had raised concerns surrounding the pair’s €9.2 billion merger deal under which eBay will sell its classifieds division to Adevinta while also becoming a significant shareholder in the Schibsted spinoff company, a situation under which the country’s three largest horizontal marketplace sites (Gumtree, Shpock and eBay marketplace) would be effectively either owned or influenced by eBay.
In response, Adevinta and eBay are proposing to divest from their main British classifieds assets (Shpock – Adevinta, Gumtree – eBay, and motors.co.uk – eBay). Although neither party will be pleased to have to divest from their UK assets, today’s press release makes clear that the country is not seen as a key market for either company and that impacts to Adevinta’s bottom line once the deal goes through will be minimal.
“In 2019, eBay Classifieds Group’s UK business accounted for less than 10% of its consolidated revenues and Adevinta’s UK business accounted for only 1% of its consolidated revenues. On a combined basis, the UK would represent less than 5% of total consolidated revenues.”
Adevinta has already sold off several of its peripheral assets recently with an eye on making the eBay Classifieds deal work. In October it sold Tayara, Avito and Fincaríz to Frontier Digital Ventures and followed up with the sale of Chilean horizontal platform Yapo to the same buyer last week.