In this day and age, corporate takeovers are the norm. However, news surfaced today that effective next year, e-commerce site eBay and it’s payment arm, PayPal will be split into two separately traded public companies. CEO John Donahoe and eBay’s board of directors announced the decision earlier this morning.
From the sounds of it, the e-commerce company was under increasing pressure from one of their investors, Carl Icahn, to split the company in two. The board of directors won a proxy fight (an attempt by shareholders to change the management of the company), but have now decided that a split is indeed better for both companies in the long run.
“What the proxy fight forced was me to come out and articulate our plan of record, our position at that moment, and that’s what I did,” Donahoe told CNBC, “As we’ve continued our annual assessment, looking forward three to five years about how we can best position eBay and PayPal, we think the competitive position and the competitive environment of commerce and payments are going through accelerating change. That creates new sets of opportunities and challenges for both eBay and PayPal and (we believe) that operating independently will give eBay and PayPal focused strategic flexibility and an ability to move quickly and decisively in this changing environment.”
As well, Donahoe will step down as CEO once the companies split by the middle of 2015, but is expecting to become a member of both boards. The new CEO of eBay will be Devin Wenig (current president of eBay Marketplaces), and Dan Schulman (current president of Enterprise Growth Group at American Express) has been hired for the top job as CEO of PayPal.
PayPal was originally purchased by eBay in 2002.
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[button link=”http://www.cnbc.com/id/102037051″ icon=”fa-external-link” side=”left” target=”blank” color=”285b5e” textcolor=”ffffff”]Source: CNBC[/button]Last Updated on November 27, 2018.
