eBay buys PayPal in £1bn deal

12 April 2012

Internet auction house EBay has said it plans to buy payment service PayPal in a £1 billion deal.

The long-anticipated merger will extend a close working relationship between eBay and PayPal, two of the most successful dot-com survivors. A growing number of eBay customers use PayPal to pay for their auction purchases and eBay said it would close its rival payment product, BillPoint, which it had purchased in 1999.

Separately, eBay said its second-quarter results would be better than earlier forecast because of strong growth in both the United States and its international operations.

California-based EBay said a share-swap which values the deal at nearly £1bn would see it acquire the smaller company.

EBay said the addition of PayPal would immediately add to its earnings, and will over time give it a share of PayPal's non-auction business. The closure of BillPoint should also enable PayPal to reach more eBay customers, it said.

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