eBay will spin off its PayPal money transfer business into a separate business.
The decision, which will not be enacted until next year, follows pressure earlier this year from activist investors, led by Carl Icahn.
The company has denied the move is in response to these demands, with current CEO John Donahoe telling Recode he hadn’t wanted to “make an important decision in a reactive way based on short-term events”.
Nevertheless, the decision is more or less exactly what the investors had demanded.
Donahoe and CFO Bob Swan will jointly oversee the partition of the two companies, after which they will resign from their positions and become board members on one or both firms.
Devin Wenig, who is currently president of eBay Marketplaces, will become CEO of the new eBay company and Scott Schenkel, currently the CFO of eBay Marketplaces, will become CFO.
On the PayPal side, Dan Schulman, who until today was president of American Express’ Enterprise Growth Group, joins immediately as president of the current business unit and will become CEO-designee of the standalone company once it’s formed.
As it stands, the company is valued at about $65 billion (£40 billion), with eBay accounting for between $30 billion and $40 billion of that and PayPal between $25 billion and $35 billion.
“Together, eBay and PayPal have delivered substantial value creation for our shareholders,” said Donahoe.
“We believe eBay and PayPal will continue to do so as separate, independent companies. Tremendous opportunities exist for each business,” he concluded
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