View all newsletters
Receive our newsletter - data, insights and analysis delivered to you
  1. Technology
  2. Data Centre
August 31, 2009

eBay to offload 65% stake in Skype for $1.9 billion

Plans to focus on auction service and PayPal

By CBR Staff Writer

eBay has signed a definitive agreement to sell 65% stake in its Skype communications unit for $1.9 billion, to private investor group led by Silver Lake and includes Index Ventures, Andreessen Horowitz and the Canada Pension Plan (CPP) Investment Board.

eBay will receive the amount in cash upon the completion of the sale and a note from the buyer in the principal amount of $125m. The company said that the sale of majority of its stake in Skype allows it to focus on the opportunities in front of PayPal and eBay.

John Donahoe, president and CEO of eBay, said: “This is a great deal, unlocking both immediate and long-term value for eBay and tremendous potential for Skype. We’ve acted decisively on a deal that delivers a high valuation, gives us significant cash up-front and lets us retain a meaningful minority stake with talented partners.”

The deal valued Skype at $2.75 billion. The company will retain an approximately 35% equity investment in Skype. The transaction, which is not subject to a financing condition, is expected to close in the fourth quarter of 2009.

eBay bought Skype in 2005 for $2.6 billion. In April 2009, it announced plans to separate Skype from the company, beginning with an IPO in 2010. The decision followed a year-long review of Skype within eBay’s portfolio.

Mr Donahoe added: “This deal achieves our goal of delivering short and long term value to eBay and its stockholders, without the possible delays and market risk of an IPO. Selling Skype now at this great valuation, while retaining an equity stake, makes sense for the company. And it allows us to focus all of our energies on the opportunities in front of PayPal and eBay.”

Silver Lake is an investment firm focused on large scale investments in technology, technology-enabled, and related growth industries. Its portfolio includes technology companies such as Ameritrade, Avago, Business Objects, Gartner, Instinet, Intelsat, NASDAQ, Sabre / Travelocity, Seagate Technology, SunGard Data Systems and UGS.

Content from our partners
Unlocking growth through hybrid cloud: 5 key takeaways
How businesses can safeguard themselves on the cyber frontline
How hackers’ tactics are evolving in an increasingly complex landscape

Websites in our network
Select and enter your corporate email address Tech Monitor's research, insight and analysis examines the frontiers of digital transformation to help tech leaders navigate the future. Our Changelog newsletter delivers our best work to your inbox every week.
  • CIO
  • CTO
  • CISO
  • CSO
  • CFO
  • CDO
  • CEO
  • Architect Founder
  • MD
  • Director
  • Manager
  • Other
Visit our privacy policy for more information about our services, how New Statesman Media Group may use, process and share your personal data, including information on your rights in respect of your personal data and how you can unsubscribe from future marketing communications. Our services are intended for corporate subscribers and you warrant that the email address submitted is your corporate email address.