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Naspers sees single global classifieds focus amid Avito deal

Jan 27 2019 12:22
Loni Prinsloo

Naspers [JSE:NPN] 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 $1.1 bn 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, Chief Executive Officer 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."

Online transformation

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. 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 $28 billion gap between its market value and that of the 31% stake it holds in Tencent. Naspers last week said it would list pay-TV unit MultiChoice on the Johannesburg stock exchange on February 27, spinning off a business it developed over decades.

Naspers shares have gained 5% this year in Johannesburg, valuing the company at $98bn.

Separately listing Avito isn’t an option for the time being, Scheepbouwer said. "Strategically Avito is very well integrated and a stand-alone IPO looks fairly unattractive."

* Fin24 is part of 24.com, a division of Media24, which is a subsidiary of Naspers.

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