eBay agrees to sell Adevinta stake for $2.25bn to net classified deal

Online auction giant eBay has agreed to sell part of its stake in Norway's Adevinta to private equity firm Permira for $2.25bn, freeing the two firms up to combine their classified ads businesses.

Austria's Federal Competition Authority demanded eBay cut its holding in Adevinta to no more than 33% in order to get approval for their plan to create a world leader in classified ads.

The US e-commerce giant has already offered to divest its British Gumtree business as well as its Motors.co.uk site to win approval in the UK. The deal was Norway’s biggest in more than a decade and significantly increased the size of Adevinta, which was spun off from Scandinavian media conglomerate Schibsted.

"The transaction announced today with Permira provides a clear path to satisfying this commitment, while delivering value to eBay shareholders," eBay said on Wednesday.

It will sell 125m Adevinta shares, or a 10.2% stake, to Permira, leaving it with a 34% holding. Permira has a 30-day option to buy an additional 10m shares at the same price, reducing eBay's stake to 33%.

Last year, Adevinta agreed to buy eBay's Classifieds Group in return for $2.5bn in cash and 540m shares.

The deal between eBay and Permira is expected to close in the fourth quarter of this year, Adevinta said.