What: EBay Inc. will sell most of its stake in MercadoLibre Inc., Latin America’s largest online marketplace.
Why it matters: MercadoLibre is one of the most active players in digital marketing in Latin America. At current prices, the offering would raise more than US$1 billion.
eBay Inc announced is selling its 20% stake in MercadoLibre Inc, which acquired back in 2001.
EBay is offering up to 5.5 million shares, and underwriters Morgan Stanley and JPMorgan Chase & Co. have an option to buy 825,000 extra MercadoLibre shares. At current prices, the offering would raise more than US$1 billion.eBay will retain the proceeds of however much it raises.
The San Jose, California-based e-commerce said the selling of the shares would mean “significant gain” on its investment in MercadoLibre and the money will be used “in a manner consistent with our capital allocation strategy.”
MercadoLibre and EBay will continue to work on cross-border transactions to help eBay sellers reach shoppers in Latin America.
MercadoLibre has a market value of US$8.1 billion and revenue last year of US$651.8 million.