EBay completes PayPal acquisition

EBay Inc. has completed the acquisition of online payment company PayPal Inc., the San Jose-based Internet auction company said in an announcement yesterday.

The stock-swap transaction, valued at $1.5 billion when announced in July (see story), was approved by holders of about 65% of PayPal's common stock, representing more than 99% of the shares voting, eBay said.

Peter Thiel, PayPal's CEO, resigned. His role will be taken over by eBay's senior vice president of global online payments, Matt Bannick, eBay said.

Mountain View, Calif.-based PayPal enables businesses and consumers to send and receive credit card and bank account payments via the Internet and e-mail. EBay's Billpoint payment system will be completely replaced by PayPal in the first half of next year.

PayPal will continue to operate as an independent brand and provide its Web Accept online payment processing service to online merchants. However, PayPal's online gaming business will be phased out, eBay said.

The $1.5 billion deal valuation is based on eBay's average closing stock price over the period two days before and after the deal was announced and a fixed exchange ratio of 0.39 eBay shares for each PayPal share, eBay said. The deal also includes about $17 million in acquisition-related costs, eBay said.

PayPal went public in February.

Copyright © 2002 IDG Communications, Inc.

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