The UK competition regulator has approved eBay’s tie-up with Norway’s Adevinta after the companies agreed to sell UK second-hand sales sites Gumtree UK and Shpock, smoothing the path for the $9.2bn classified advertisements deal.
The deal between Silicon Valley-based eBay and Norway’s Adevinta will create the world’s largest online classified advertising group. On Wednesday the Competition and Markets Authority said it had accepted the remedies put forward by the parties in March in order to avoid an in-depth merger investigation.
Ebay agreed to combine with Adevinta in July last year after activists pressured eBay to slim down its business. The eBay classified ads business included Gumtree and Canada’s Kijiji, along with vehicle marketplace sites in Denmark, Germany, Italy and the UK.
The CMA raised concerns about the deal in February, claiming it could lead to a “loss of competition” because of the level of influence that eBay would be able to exert over the combined group. The regulator said Gumtree would also no longer be an “independent competitor to eBay’s marketplace” after the deal, leaving Facebook’s Marketplace as the only remaining significant rival.
Adevinta will now sell Shpock, while eBay will sell its UK Gumtree business, which includes its Motors.co.uk used-car site. The UK businesses would together have represented less than 5 per cent of the combined group if the deal had gone ahead as planned.
In an update published on Thursday, the CMA said it “considers that the undertakings given . . . by Adevinta and eBay are appropriate to remedy, mitigate or prevent the substantial lessening of competition, or any adverse effect which may be expected to result from the transaction.”
In a statement on Wednesday Adevinta said it hoped to complete its “acquisition of eBay Classifieds Group” in the second quarter of the year, subject to regulatory approval in Austria.
The CMA said Liechtenstein-based investment group and online marketplace operator RussMedia Equity Partners had agreed to buy Shpock upfront. It is still waiting to agree a buyer for Gumtree UK.