MOSCOW, September 30 (RIA Novosti) - EBay Inc. announced Tuesday it was going to spin off its PayPal payments business to create two independent publicly traded companies in 2015, according to the company's press release.
"Creating two standalone businesses best positions eBay and PayPal to capitalize on their respective growth opportunities in the rapidly changing global commerce and payments landscape, and is the best path for creating sustainable shareholder value," the California-based company said.
The plan, which is regarded as a sharp reversal in the company's strategy, was approved by eBay's board of directors. A tax-free spin is expected to be completed in the second half of the next year.
"For more than a decade eBay and PayPal have mutually benefited from being part of one … However, 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 President and CEO John Donahoe said.
The alone-standing eBay legacy business will be headed by Devin Wenig, who currently presides over eBay Marketplaces, while American Express CEO Dan Schulman will immediately take over as the president of PayPal.
EBay's John Donahoe and Chief Financial Officer Bob Swan will be overseeing the transaction and serve on the boards of new independent companies.
The company said however that it planned to "preserve eBay and PayPal relationships through arm's length operating agreements."
EBay is one of the world's top 30 global brands and a top 10 retail global brand, while PayPal today facilitates one in every six dollars spent online. Both eBay and PayPal businesses grew around 10 percent year-on-year to $9.9 billion over the past twelve months.
The decision to split up eBay was initially resisted by the company's board, but its activist investor Carl Icahn, who had been pressing for the separation earlier this year, was eventually heard.
