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EBay to separate from payments unit PayPal

Bloomberg News

EBay Inc., the world's biggest online marketplace, said it is separating from its payments arm PayPal, in a move that will create two separate publicly companies.

EBay and PayPal will become independent companies in 2015, subject to customary conditions, the San Jose, California-based company said in a statement. Creating two standalone businesses will allow each to capitalize on their respective growth opportunities and is the best way to create sustainable shareholder value, the company said.

The announcement follows activist shareholder Carl Icahn's campaign earlier this year for EBay to spin off the payments unit. The parties had settled in April and EBay agreed to add an independent director.

Devin Wenig, currently president of EBay Marketplaces, will become CEO of the new EBay company. Dan Schulman, who is joining PayPal from American Express, will be president of PayPal, effective immediately, and CEO-designee of the standalone PayPal company following separation.

EBay's shares fell 0.5 percent to $52.66 yesterday and had fallen 4 percent this year through yesterday.

The San Jose, California-based company also took a tax charge to let it repatriate foreign earnings, although it hasn't specified any plans for the money.

To contact the reporter on this story: Niamh Ring in New York at nringbloomberg.net To contact the editor responsible for this story: Cecile Daurat at cdauratbloomberg.net

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