- The transaction of BRL 2.9 billion ($642 million) will be paid all-cash through a capital increase made possible by OLX shareholders in Brazil;
- The deal still needs to be approved by Cade (Administrative Council for Economic Defense), Brazil’s competition watchdog
Online marketplace OLX Brazil is buying its competitor Grupo Zap for BRL 2.9 billion, the equivalent of $642 million, as reported by Valor Econômico. Now, OLX grows in importance as a leading Brazilian player in real estate marketplaces: combining operations will reduce costs and boost earnings.
Netherlands-based OLX had already become the main destination for buying and selling used products in Brazil, largely due to the decision by competitor Argentina’s MercadoLibre to focus on new products.
The transaction will be funded by OLX’s owners, Adevinta (owned by Norway’s Schibsted ASA) and Dutch-listed Prosus (controlled by South Africa’s Naspers Ltd). It’s a big step for digital real estate market, because although Brazil is a good place for buying and selling properties, its use of online listings is still a “baby”, as Chief Executive Rolv Erik Ryssdal of Oslo-listed Adevinta said to Reuters.
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“Expanding in territories where we see significant growth opportunities is a key pillar of Adevinta’s strategy. I’m delighted to see OLX Brazil strengthening its position in order to capture part of the upcoming growth potential”.Rolv Erik Ryssdal, Chief Executive of Norway’s Adevinta
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The deal still needs to be approved by CADE, the Brazilian antistrust agency, and is expected to be done by the second semester of 2020.
Meanwhile, OLX continues its expansion in Latin America. In Colombia, the company publishes more than 50.000 vehicles each month and sells half of this listing, as André Buitrago, manager of Colombia’s OLX said to La Republica.