Ebay and Adevinta sell British units to secure CMA approval
Ebay and Adevinta have announced plans to divest three smaller British units, including Gumtree, in a bid to secure regulatory approval for their merger.
The Competition and Markets Authority (CMA) last month said the two companies would have to resolve their concerns before proceeding with the $9.2bn tie-up.
As a result the companies have set out proposals to divest the Norwegian company’s Shpock business while US ecommerce giant Ebay is set to sell Gumtree and Motors.co.uk.
The regulator today said it “considers there are reasonable grounds for believing that the undertakings offered by Adevinta and Ebay, or a modified version of them, might be accepted by the CMA”.
Adevinta’s planned acquisition of Ebay’s classified ads business was announced last summer and would create the world’s largest classifieds group if approved.
The sale would see Ebay acquire a 33.3 per cent voting stake in Adevinta and positions on the board. This sparked concerns Ebay would be able to influence the business strategy for both Gumtree and Shpock.
In its Phase 1 investigatio the CMA said it was concerned of a loss of competition between Shpock, Gumtree and Ebay’s marketplace, leaving only Facebook Marketplace as a significant competitor
“The companies have offered the sale of two businesses which we believe may address the competition concerns our investigation raised. The CMA will now review these proposals carefully before making our final decision,” the regulator’s director of mergers Joel Bamford said.
“This is one of an ongoing series of merger probes involving large digital mergers, where we are scrutinising deals to preserve competition and protect consumers’ interests.”
The markets watchdog now has until 29 April 2021 to decide whether to accept the undertakings, with the possibility to extend this timeframe to 28 June 2021 if it considers there are special reasons for doing so.