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OSLO (Reuters) – The British competition authority (CMA) said it’s concerned about the planned acquisition by Norway’s Adevinta of eBay (NASDAQ:EBAY)’s classified ads business, sending Adevinta’s shares lower.
The deal, worth $9.2 billion and announced in July, would create the world’s largest classifieds group.
Ebay owns UK sites Gumtree and ebay.co.uk. Adevinta owns Shpock.
“The CMA is concerned the merger could lead to a loss of competition between Shpock, Gumtree and eBay’s marketplace, with only Facebook (NASDAQ:FB) 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.”
Adevinta shares were down 2.2% at 0852 GMT, lagging an Oslo benchmark index up 0.2%.
Britain accounted for less than 10% of the consolidated revenues of Ebay’s classified business and 1% of Adevinta’s consolidated revenues, Adevinta said.
The CMA’s move is the second in recent weeks probing a deal involving digital companies, including eBay.
On Feb. 2, the CMA said that Viagogo must sell StubHub’s international business after an inquiry found that its $4.05 billion purchase of eBay’s ticket-reselling unit would reduce competition in the UK.
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 their proposals, or to refer the deal to an in-depth investigation, the firm said.
Adevinta said it would provide a further update in early March following the CMA’s decision.
