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UK watchdog voices concern over US$9.2 billion eBay-Adevinta deal

UK watchdog voices concern over US$9.2 billion eBay-Adevinta deal

FILE PHOTO: The eBay logo is pictured on a phone screen in this photo illustration July 23, 2019. REUTERS/Brendan McDermid/Illustration/File Photo

OSLO: Britain's competition watchdog on Tuesday raised concerns over Adevinta's planned acquisition of U.S. e-commerce group eBay's classified ads business, sending the Norwegian company's shares down 4.3per cent.

The US$9.2 billion deal announced in July would create the world's largest classifieds group, but Adevinta and eBay must first resolve the Competition and Markets Authority's concerns (CMA) to proceed with the takeover.

"The CMA is concerned the merger could lead to a loss of competition between Shpock, Gumtree and eBay's marketplace, with only Facebook Marketplace remaining as a significant competitor," the CMA said in a statement.

"This could reduce consumer choice, increase fees or lower innovation in the supply of platforms that allow people to buy and sell goods online."

U.S. group eBay owns UK online auction sites Gumtree and ebay.co.uk while Adevinta owns Shpock.

With the sale of its classifieds business, eBay will acquire a 33.3per cent voting stake in Adevinta and positions on the Adevinta board, the CMA also noted.

Britain accounted for less than 10per cent of the consolidated revenue of eBay's classifieds business and 1per cent of Adevinta's consolidated revenue, Adevinta said.

In the latest CMA merger investigation involving large digital companies, the watchdog said it is "thoroughly examining deals to ensure that competition is not restricted and consumers' interests are protected".

The CMA this month said Viagogo must sell StubHub's international business after its US$4.05 billion purchase of eBay's ticket-reselling business.

Adevinta and eBay will together propose legally binding solutions to resolve the regulator's concerns before the deadline of Feb. 23, Adevinta said.

The CMA would then have five working days to consider whether to accept the companies' proposals or to refer the deal for an in-depth investigation.

Adevinta shares were down 4.3per cent at 1121 GMT, lagging a flat Oslo benchmark index.

The company said it would provide a further update in early March after the CMA's decision.

(Additional reporting by Victoria Klesty; Editing by Larry King and David Goodman)

Source: Reuters

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