The move is expected to make it faster and easier for people to trade and turn their items into cash. The firms also aim to cut costs, expertise and help build awareness online classifieds to consumers easily.
In a statement Rolv Erik Ryssdal, CEO of Schibsted Media Group, said “Schibsted, our existing partners and Naspers have all been at the forefront in developing high quality, online market places for consumers wanting to buy and sell in a number of emerging markets. By joining forces, we will be able to further develop these market places even more efficiently”.
The ownership structure in the joint ventures will be as follows:
- Brazil: 50.0% Naspers and 50.0% SnT Classifieds*
- Indonesia: 64.0% Naspers and 36.0% 701 Search*
- Thailand: 55.9% 701 Search and 44.1% Naspers
- Bangladesh: 50.3% SnT Classifieds and 49.7% Naspers
*SnT Classifieds is an equal shareholding joint venture between Schibsted and Telenor and 701 Search is an equal partnership joint venture amongst Schibsted, Telenor and SPH.
As part of the agreement, 701 Classifieds will transfer its online classifieds business in the Philippines to Naspers, who will manage the operation. This would allow 701 Search to focus its efforts in Thailand. In certain other markets in Latin America and Asia Schibsted, SnT Classifieds and 701 Search, respectively, acquire Naspers’ operations. At the same time, Naspers acquires the operations of Schibsted, SnT Classifieds and 701 Search in certain other markets.
The firm did not specify which other markets but sources close to TechMoran believe Africa and India are highly on the table.
Schibsted says the deal will see it gain in the range of NOK 300-400 million and the transaction is not expected to have any significant tax effects, and it is cash neutral. The investment spend affecting Schibsted’s profits is likely to go down significantly going forward. However, we are prepared to invest necessary amounts in order to develop profitable markets.
The transaction is subject to EU approval and is expected to close in early 2015.
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