eBay, the world's largest online auctioneer, has bought out India's largest online marketplace Baazee.com Inc. and its subsidiary Baazee.com India Pvt Ltd, for $50 million.
The acquisition is expected to close in the third calendar quarter of 2004. eBay will acquire all outstanding shares of Baazee.com, Inc for approximately $50 million, plus acquisition costs and post-signing adjustments.
The agreement will allow eBay to expand its global footprint into the nascent but growing Indian market, says an eBay media release.
In turn, Baazee.com will use its new relationship with eBay to further develop its business and strengthen its position in India's e-commerce market. The combination of Baazee.com and eBay will allow buyers and sellers in India and around the world to gain access to a broader range of choice and convenience, said the release.
Mumbai-based Baazee.com offers a diverse online marketplace for a range of buyers and sellers throughout India. The media release claimed that Baazee.com has more than 1 million confirmed registered users who trade in a wide range of categories from consumer electronics and computers, to home decor and jewellery.
"Our relationship with Baazee.com is another important step in the growth of eBay's global marketplace," said Meg Whitman, President and CEO of eBay, in the media release.
"Although it's early days for e-commerce in India, we
believe there is great opportunity over the long term. Baazee.com's strong management team and solid focus on its community make it a natural fit with eBay," she added.
"Our partnership with eBay validates Baazee.com's business model and position in the industry," said Avnish Bajaj, Chairman and Co-CEO of Baazee.com.
"Our local expertise combined with eBay's global perspective will allow us to take e-commerce in India to the next level."
"We built Baazee.com to change the way people buy and sell goods in India," said Suvir Sujan, Co-CEO of Baazee.com. "Becoming part of eBay will allow us to provide even greater economic opportunity for our community of users."
A young market in terms of e-commerce adoption, India's Internet penetration is growing steadily. eBay estimates that there are currently 17 million Internet users in India, and by 2006 that number may grow to 30 million, still a tiny fraction of the country's one billion population.
eBay does not expect the acquisition to have a material impact on 2004 net revenue and earnings per share, and does not expect it to affect eBay's financial guidance as issued in connection with its first quarter earnings release on April 21, 2004, said the media release.
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