Ecommerce giant eBay has announced plans to sell the “majority” of its stake in Latin American online marketplace MercadoLibre — in what is just one in a number of divestments on eBay’s part in recent times.
Headquartered in Argentina, MercadoLibre has been called the eBay of Latin America and is one of the biggest ecommerce platforms in South- and Central America by number of visitors. It operates across its native Argentina, as well as Chile, Brazil, Colombia, Mexico, and other markets.
MercadoLibre’s relationship with eBay dates all the way back to October 2001, when MercadoLibre acquired iBazar Como, the Brazilian subsidiary of European online auction site iBazar S.A that eBay had acquired earlier that year. In place of an all-cash deal, eBay took a 19.5 percent stake in MercadoLibre, with the duo also committing to sharing best practices.
That eBay is now selling its stake in MercadoLibre is consistent with eBay’s moves elsewhere, as it has been slimming down significantly over the past 18 months. Kicking off last summer, eBay sold its Craigslist stake back to Craigslist before spinning PayPal out into its own standalone company. Later, it sold eBay Enterprise to an investment consortium for $925 million before shifting a portion of its stake in Indian ecommerce site Snapdeal, claiming a “strong return” on its initial investment.
As with the Snapdeal sale, eBay says that this sale will enable it to “realize a significant gain” on its original investment in MercadoLibre, but it hasn’t revealed if it has an actual buyer yet. What’s perhaps notable in both the Snapdeal and MercadoLibre deals is that eBay has elected to keep a stake in the companies. Retaining a vested interest in activity in both Latin America and India will serve as the basis for a broader strategic partnership in the regions.
“The continuation of our relationship is underscored by our announcement today of a new strategic agreement with MercadoLibre that is designed to advance eBay’s cross-border trading business opportunities for its sellers who are targeting buyers in Latin America,” said eBay, in a statement.