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The
$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
33.3% voting stake in Adevinta and positions on the Adevinta
board, the CMA also noted.
Britain accounted for less than 10% of the consolidated revenue
of eBay's classifieds business and 1% 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 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 4.3% 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)
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