OSLO: U.S. e-commerce group eBay and Norway's Adevinta plan to sell three smaller British units in order to secure regulatory approval for a long-planned tie-up of their global classified ads businesses, the two firms said on Tuesday.
Britain's Competition and Markets Authority (CMA) last month said Adevinta and eBay would have to resolve the watchdog's concerns before proceeding with their US$9.2 billion deal.
In response, Adevinta and eBay proposed to sell each company's primary classifieds operations in Britain, namely Shpock, Gumtree and Motors.co.uk.
"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," the companies said in a statement.
On a combined basis, the British businesses would have represented less than 5per cent of total consolidated revenue for the merged classified ads company, they added.
Under a deal struck last July, Adevinta will acquire eBay's classified ads business in return for US$2.5 billion in cash and 540 million shares, making the U.S. firm Adevinta's largest shareholder with a 44per cent stake and 33.3per cent of the vote. EBay will also get two seats on Adevinta's board.
The companies said on Tuesday that they aim to close the transaction in the second quarter of 2021, subject to final ratification of the plan by the CMA and regulatory approval in Austria.
Adevinta's share price, which fell last month on news of the CMA's objections to the deal, got a small boost in early trade on Tuesday before retreating to stand 0.8per cent lower by 0827 GMT.
(Reporting by Terje Solsvik, editing by Louise Heavens, Kirsten Donovan)