eBay and PayPal announced on Tuesday that the two companies will officially split next year. Each will be publicly traded. PayPal said that the split is in an effort for both to focus on growth in different landscapes and eBay CEO and president John Donahoe said keeping the two together would have been “less advantageous” for both firms.
“The pace of industry change and innovation in commerce and payments requires maximum flexibility to stay competitive and drive global leadership,” the two firms said in a joint release Tuesday. “The benefits of the existing relationships between eBay and PayPal will naturally decline over time and can be optimized in arm’s length operating agreements between the two entities. Beyond 2015, eBay and PayPal will each benefit more and create greater value from the strategic focus, speed, flexibility and agility that come with being independent publicly traded companies.”
The split is set to occur during the second half of 2015 following regulatory and market approval. eBay Marketplaces president Devin Wenig will serve as CEO of the new ebay and eBay’s current CEO John Donahoe and chief financial officer will relinquish executive roles. Dan Schulman will serve as the president of PayPal and comes from American Express.