eBay has decided to spin-off its online payment business PayPal as a new company next year to give it more operational freedom.
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eBay’s plan was approved by its board of directors after a strategic review of the company’s growth strategies and structure.
"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 company said in a statement.
John Donahoe, president and CEO of eBay, said: "eBay and PayPal are two great businesses with leading global positions in commerce and payments.
"For more than a decade eBay and PayPal have mutually benefited from being part of one company, creating substantial shareholder value.
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By GlobalData"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."
Devin Wenig, currently president of eBay Marketplaces, will become CEO of the new eBay company. In the new role, Wenig will lead the eBay Marketplaces and eBay Enterprise businesses.
Scott Schenkel, the current CFO of eBay Marketplaces, will become the CFO of the new eBay company.
eBay has appointed Dan Schulman as the president of PayPal, effective immediately, and as the CEO of the standalone PayPal company following separation.
Schulman joins PayPal from American Express, where he was president of the company’s Enterprise Growth Group.
Subject to market, regulatory and certain other conditions, the transaction is expected to be completed in the second half of 2015.
