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UPDATE 4-UK watchdog voices concern over $9.2 bln eBay-Adevinta deal

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Gwladys Fouche
·2 min read
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* Deal would create world's largest classifieds ads group

* Adevinta says companies will seek to resolve CMA'sconcerns

* Adevinta shares down 4.3%(Adds detail, updates shares)

By Gwladys Fouche

OSLO, Feb 16 (Reuters) - Britain's competition watchdog onTuesday raised concerns over Adevinta's plannedacquisition of U.S. e-commerce group eBay's classifiedads business, sending the Norwegian company's shares down 4.3%.

The $9.2 billion deal announced in July would create theworld's largest classifieds group, but Adevinta and eBay mustfirst resolve the Competition and Markets Authority's concerns(CMA) to proceed with the takeover.

"The CMA is concerned the merger could lead to a loss ofcompetition between Shpock, Gumtree and eBay's marketplace, withonly Facebook Marketplace remaining as a significantcompetitor," the CMA said in a statement.

"This could reduce consumer choice, increase fees or lowerinnovation in the supply of platforms that allow people to buyand sell goods online."

U.S. group eBay owns UK online auction sites Gumtree andebay.co.uk while Adevinta owns Shpock.

With the sale of its classifieds business, eBay will acquirea 33.3% voting stake in Adevinta and positions on the Adevintaboard, the CMA also noted.

Britain accounted for less than 10% of the consolidatedrevenue of eBay's classifieds business and 1% of Adevinta'sconsolidated revenue, Adevinta said.

In the latest CMA merger investigation involving largedigital companies, the watchdog said it is "thoroughly examiningdeals to ensure that competition is not restricted andconsumers' interests are protected".

The CMA this month said Viagogo must sell StubHub'sinternational business after its $4.05 billion purchase ofeBay's ticket-reselling business.

Adevinta and eBay will together propose legally bindingsolutions to resolve the regulator's concerns before thedeadline of Feb. 23, Adevinta said.

The CMA would then have five working days to considerwhether to accept the companies' proposals or to refer the dealfor an in-depth investigation.

Adevinta shares were down 4.3% at 1121 GMT, lagging a flatOslo benchmark index.

The company said it would provide a further update in earlyMarch after the CMA's decision.(Additional reporting by Victoria KlestyEditing by Larry King and David Goodman)