EBay on Monday sold off the majority of its classified ad division for $9 billion. The unit was purchased at auction by Norwegian online marketplace business, Adevinta, while eBay plans to keep a minority stake, according to reports.

Activist investors Elliott Management and Starboard Value had recently been advocating for the sale of eBay’s classified and ticket-selling divisions since January 2019, according to a report from Reuters. The firms believed that these sales could help double the e-commerce company’s value.

The decision to retain a stake will reportedly bring the company around $2.3 billion in tax benefits each year.

In the midst of the coronavirus pandemic, the demand for online marketplaces like those offered by eBay has surged due to due many people being forced to shop while in lockdown. The company’s classified ads division brought in an operating income of $83 million and $248 million in revenue during the first quarter of 2020.

The sale is predicted to double the value of buyer Adevinta, whose prior holdings have mostly focused on markets across Europe. The company currently operates Leboncoin – the largest online classifieds site in France – as well as OLX in Brazil and “dozens” more in Europe, North Africa, North America, and South America.

“There is a relevant geographic overlap between the two businesses - for example in Germany, Italy, and the U.K.,” Deutsche Bank said in a note about the sale. “But we think the acquisition could also be attractive to reinforce Adevinta’s position as a pan-European online classifieds player.”

eBay
A close up of a tablet device displaying the eBay tablet app in London, England, May 30, 2018 Stuart C. Wilson/Getty Images for eBay
RELATED STORIES
Coronavirus Germany United kingdom Software