Britain’s competition watchdog on Tuesday raised concerns over Adevinta’s planned acquisition of US e-commerce group eBay’s classified advertisements business, sending the Norwegian company’s shares down 4.3 percent.
The $ 9.2 billion (roughly Rs. 67,040 crores) deal announced in July would create the world’s largest classifieds group, but Adevinta andmust 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 onlyMarketplace 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.”
US 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 33.3 percent voting stake in Adevinta and positions on the Adevinta board, the CMA also noted.
Britain accounted for less than 10 percent of the consolidated revenue of eBay’s classifieds business and 1 percent 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 $ 4.05 billion (roughly Rs. 29,500 crores) 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 February 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 4.3 percent at 11:21 GMT (roughly Rs. 4:51 pm), lagging a flat Oslo benchmark index.
The company said it would provide a further update in early March after the CMA’s decision.
© Thomson Reuters 2021
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