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.
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