Ebay to spin off Paypal
Online auctions giant Ebay has revealed that it plans to spin off its Paypal payments business into a separately traded company.
The transaction is expected to be completed in the second half of 2015.
"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," eBay president and chief executive John Donahoe said in a statement.
Devin Wenig, who is currently president of eBay Marketplaces, will be chief executive of the new eBay.
Dan Schulman, who is president of the enterprise growth division at American Express, will head the new PayPal.
PayPal, which eBay bought 12 years ago, generates almost half the eBay's revenue.
Activist hedge fund magnate Carl Icahn first demanded a separation about nine months ago as a way to generate more value for shareholders. It was the cause of a lengthy rift between Icahn and eBay. Icahn argued that a split would bring out PayPal’s own strengths while allowing eBay to focus on its core businesses.