eBay has announced that it will sell the majority of its stake in Latin America's largest e-commerce technology company MercadoLibre.
Seeking Alpha reports that the e-commerce giant plans to sell 5.5M shares in MercadoLibre in a follow-on offering and that the underwriters will also have the option to purchase another 825K shares from eBay.
eBay offered an explanation for the sale via a company statement.
"eBay and MercadoLibre have a strong, long-standing relationship. We entered into a strategic agreement with MercadoLibre in 2001, when MercadoLibre acquired iBazar Com Ltda, the Brazilian subsidiary of iBazar SA, which previously had been acquired by eBay. In return for MercadoLibre’s acquisition of iBazar Com Ltda, eBay received an ownership interest in MercadoLibre.
"Our relationship has helped advance eBay’s strategy in the region and allowed both companies to share best practices. The continuation of our relationship is underscored by our announcement today of a new strategic agreement with MercadoLibre that is designed to advance eBay's cross-border trading business opportunities for its sellers who are targeting buyers in Latin America.
"eBay’s commitment to Latin America remains unchanged as a result of this transaction. We are focused on providing consumers in the region with access to our extensive supply of distinct inventory from all over the world that cannot always be found in the local market. "