Which Amazon’s new business partners will be in Amazon’s crosshairs?
Amazon, in a move that some Amazon competitors have described as a threat, on Monday announced that it has signed a $5 billion partnership with e-commerce giant eBay, the largest of Amazon’s dealmaking partners.EBay, which has a market value of $75 billion, will buy a 10% stake in Amazon.
In return, Amazon will be able to acquire and resell eBay’s e-retail business, which includes millions of items.
In addition, Amazon has secured a 25% stake, worth $5.3 billion, in eBay stock, a deal that could potentially lead to Amazon’s acquisition of the online retailer.
Ahead of the announcement, Amazon chief executive Jeff Bezos said that he was not sure whether the deal would benefit Amazon’s stock price, but added that he hoped it would.
Amazon, he said, is “not just a big business,” but a “big value proposition” for its shareholders.
While Amazon is the largest publicly traded company in the world, it is not the only one in the e-tailing business.
eBay also is part of Amazon Prime, the company’s paid service that allows people to buy and sell items for a fee, a service that has grown in popularity in recent years.
Amazon and eBay’s partnership with eBay will be one of the largest in the history of the ecommerce giant.
The companies, which have more than 40 million active sellers and have a combined market value exceeding $50 billion, have signed hundreds of agreements over the past several years.
Last year, Amazon purchased an additional 3.5 million eBay shares.
That transaction, along with other Amazon-Ebay deals, resulted in Amazon getting a majority stake in the online retailing giant, which is estimated to be worth $60 billion.
Amazon did not disclose how much of the deal’s value would be returned to eBay, though it said it would give the company 25% of any proceeds.
The company has said that the sale of eBay shares to Amazon will provide the company with “a substantial cash infusion” for the future.
Ebay CEO Jeff Bezos, left, speaks with Amazon’s Jeff Bezos after the announcement of the $5-billion deal between the online shopping giant and eBay, in this Aug. 30, 2017 file photo.
Amazon also announced Monday that it is entering into a $10 billion deal with Walmart for online merchandising, which will include an increase in its sales volume.
The deal with eBay comes as Amazon faces stiff competition from Amazon.com, the online commerce giant’s primary competitor in the marketplace.
Amazon has been expanding its online shopping service and its retail stores, selling goods in the $200-to-$500 range.
Amazon is also expanding its delivery services and selling items online.
The online retailer has about 3.2 million online customers and more than 300,000 physical stores, according to research firm Forrester Research.