South African e-commerce and media firm Naspers Holdings announced today it will merge two of its Russian Internet sites with its Russian Internet rival Avito.ru in a US$570 million deal.
Naspers has become a US$29 billion Internet powerhouse by buying businesses in quickly expanding markets. In this deal, it plans to merge its Slando.ru and OLX.ru classified websites with Avito.
According to reports, the deal would create the world’s third largest classified website. Naspers is also investing US$50 million into Avito, giving it an 18.6 percent stake in the company.
“The rationale for this transaction was to create a stronger market player in the high-growth Russian classifieds market, in which we’ll have a significant minority stake,” said Meloy Horn, a spokeswoman for Naspers.
After the deal, Avito is likely to have a 25 per cent share of the Russian classified market with regards to site traffic, as well as a 15 per cent share in revenue terms, based on the Financial Times.
Earlier this month, Naspers was reported to have acquired a 50 per cent holding in leading Nigerian online general merchandise store Konga.com. A report by HumanIPO states that Naspers’ group information relations officer, Meloy Horn, claimed that the media giant was “anticipating favourable collaborations involving both parties in the near future.”