The global classifieds operator Adevinta has today released a statement saying that The UK Competition and Markets Authority has concerns surrounding the company’s deal to buy eBay’s classifieds division. The CMA’s concern is that Shpock (an Adevinta marketplace launched in 2012), Gumtree and eBay would be controlled by the same interest leaving only Facebook Marketplace as real competition thus leaving British consumers at a disadvantage.
Today’s announcement from the CMA gives eBay and Adevinta until the 23rd of February to propose solutions to the issue in order to avoid the transaction being referred for further investigation which could prove costly for both parties and weaken an already stagnant Adevinta stock price.
Today’s missive from Adevinta stated that: “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”, before going on to add that “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.”
Announced in July, the deal which saw Schibsted offshoot company Adevinta beat Prosus and others to the €9.2 billion purchase of eBay’s classifieds division was the most expensive in the history of the online classifieds industry. Under the terms of the deal, brands such as generalist marketplaces Kijiji, Gumtree and Marktplaats as well as autos vertical Mobile.de will pass to Adevinta control with eBay becoming a significant Adevinta shareholder.
Although the deal has cleared competition hurdles in Germany, it still faces scrutiny in several other key European markets apart from The UK before final consolidation.
Complications around national competition authorities would have been anticipated for a deal of this size, indeed a key reason for eBay’s board choosing Adevinta over fellow online classifieds operator Prosus was reportedly the smaller overlap in markets in which Adevinta already operated in.