eBay is to demerge its PayPal online payments service to create a new, independently traded company.
The firm said the move was the best way to allow each business to make the best of their respective growth opportunities and create sustainable shareholder value.
“eBay and PayPal are two great businesses with leading global positions in commerce and payments,” said eBay Inc. President and CEO John Donahoe.
“For more than a decade eBay and PayPal have mutually benefited from being part of one company, creating substantial shareholder value.
“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 while American Express executive Dan Schulman becomes President of PayPal and CEO-designee of the standalone company.
PayPal was bought by eBay in 2002 for $1.5bn and now has over 143 million active users.