E-commerce giant Ebay said today it will spin off PayPal, its fast-growing payments unit, into an independent publicly traded company in the second half of 2015.
"A thorough strategic review with our board shows that keeping eBay and PayPal together beyond 2015 clearly becomes less advantageous to each business strategically and competitively," eBay chief executive John Donahoe said.
In a statement, Ebay said that creating two standalone businesses “best positions eBay and PayPal to capitalise on their respective growth opportunities in the rapidly changing global commerce and payments landscape, and is the best path for creating sustainable shareholder value”.
Ebay acquired Paypal for $1.5 billion back in 2002, and the combined companies employ about 2,000 people in Ireland, with annual revenues of about €150 million, according to www.top1000.ie,
Ebay expects to complete the transaction as a tax-free spin-off in the second half of 2015, subject to market, regulatory and certain other conditions. Ebay president and CEO John Donahoe and company CFO Bob Swan will be responsible for leading the separation of each business.
Devin Wenig, currently president of Ebay Marketplaces, will become CEO of the new Ebay company. As CEO of Ebay, Wenig will lead the Ebay Marketplaces and Ebay Enterprise businesses.
Dan Schulman will be president of PayPal, effective immediately, and CEO-designee of the standalone PayPal company following separation. Schulman joins PayPal from American Express, where he was president of the company's Enterprise Growth Group.
Activist investor Carl Icahn had been pressuring Ebay to spin off its faster growing payments company Paypal for some time.
