Naspers pays $1.1bn for Russian classified ads business
The plan is to consolidate the different local platforms into a single global one, CEO says
Global media and internet group Naspers will focus on consolidating technologies and harnessing artificial intelligence across its e-commerce business after taking full control of Russia’s largest classified advertising platform in a $1.1bn deal.
Africa’s biggest company by market value on Friday said it bought out minority shareholders in Avito BB through its classifieds business OLX Group, increasing exposure to Russia’s e-commerce market and strengthening its global position in the sector.
The plan is to consolidate the different local platforms into a single global one, CEO for classifieds Martin Scheepbouwer said on Saturday.
“The key task at hand is to consolidate our technology,” he said. “We want to share technology, artificial intelligence and data efforts to have solutions work across the business globally.”
Naspers has transformed itself from a newspaper publisher into a $98bn media empire by pushing into e-commerce, holding stakes in Russian internet group Mail.Ru Group and Chinese social network firm Tencent Holdings.
In the nine months prior to the Avito deal, it spent more than $700m on acquisitions and investment in the classified sector.
“Exchanging technology, exchanging people was quite difficult until this deal,” Scheepbouwer said. “Potentially we could take Avito to other countries, but the key focus is to integrate technology and leverage scale of our classifieds business under the OLX umbrella.”
In aggregate, Naspers’s classifieds business is now profitable, he said. The division is worth as much as $10bn, excluding the latest Russian deal, according to an analyst’s report by Barclays.
The deal is also a further step in reducing an almost $28bn gap between its market value and that of the 31% stake it holds in Tencent.
Naspers has said it will list pay-TV unit MultiChoice on the JSE on February, spinning off a business it developed over decades.
The value of the new listing could be between R40bn and R75bn, Busines Times reported, adding the business generated R47bn in revenue, with a trading profit of R6bn and core headline earnings of more than R1bn. It also plans a dividend of R2.5bn for 2020.
Naspers shares have gained 5% so far this year in Johannesburg, valuing the company at R1.34-trillion.
Separately listing Avito isn’t an option for the time being, Scheepbouwer said. “Strategically Avito is very well integrated and a standalone IPO looks fairly unattractive.”