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 US$1.1-billion deal.
Africa’s biggest company by market value on Friday announced it bought out minority shareholders in Avito 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, Naspers CEO for Classifieds Martin Scheepbouwer said by phone 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 R1.3-trillion media empire by pushing into e-commerce, holding stakes in Russian Internet group Mail.Ru and Chinese social network firm Tencent. In the nine months prior to the Avito deal, it spent $718-million 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 $10-billion, excluding the latest Russian deal, according to an analyst’s report by Barclays.
The deal is also a further step in reducing an almost $28-billion gap between its market value and that of the 31% stake it holds in Tencent. Naspers earlier this week said it will list pay-TV unit MultiChoice on the JSE on 27 February, spinning off a business it developed over decades.
Separately listing Avito isn’t an option for time being, Scheepbouwer said. “Strategically, Avito is very well integrated and a stand-alone IPO looks fairly unattractive.” — Reported with assistance from Ilya Khrennikov, (c) 2019 Bloomberg LP