InterContinental Exchange (ICE), the parent company of New York Stock Exchange, has reportedly taken over e-commerce company eBay. Many see the move as a strategy to expand the business area from the financial market to the e-commerce platform.
Citing multiple sources, the Financial Times and Reuters reported that the ICE, the world’s second-largest stock exchange, had preliminary talks with eBay for mergers and acquisitions. But it’s uncertain whether it will lead to actual acquisition.
ICE eBay acquisitions: nothing official
Both ICE and eBay have not commented on the matter yet. But eBay shares surged 8.78 percent on the day the news broke, as it could be an opportunity to improve the management. EBay has been plagued with fierce competition in the e-commerce industry. Their rivals include US retail giants Amazon, and Walmart.
U.S. activist hedge funds Starboard Value and Elliott Management have also been ramping up pressure on eBay to improve its management. The latter reportedly owns more than 4 percent of eBay.
On the contrary, shares of ICE fell 7.45 percent. There have been lingering doubts on what the market indexes and financial information provider could expect in acquiring the e-commerce platform.
“ICE has been growing successfully through M&A,” he said. “It is unclear how ICE’s expertise will be applied to eBay. It’s an acquisition deal that goes beyond the ICE’s core capabilities,” he noted.
On the other hand, some experts said that ICE will be able to establish a platform business for cryptocurrency transactions that it started last year through eBay. In addition, some predicted that ICE could expand its business scope by utilizing eBay’s various e-commerce data.
eBay’s market capitalization is around $30 billion. Reuters predicted that the actual size of the acquisition offer would exceed $30 billion. Financial Times said it was unclear whether it would be able to receive a valuation exceeding $30 billion. The market capitalization of ICE is about $50 billion.