eBay announced it has completed its acquisition of PayPal, Inc. Shareholders holding approximately 65% of the outstanding PayPal common stock voted in favor of the transaction at a special meeting yesterday.
eBay acquired all of the outstanding shares of PayPal in a tax-free, stock-for-stock transaction using a fixed exchange ratio of 0.39 of an eBay share for each PayPal share. Based on eBay's stock price at the time of the announcement in July, the transaction was valued at approximately $1.5 billion.
Earlier in the day, eBay had filed documents with the SEC (Securities and Exchange Commission) notifying the agency that it has obtained all approvals under applicable state money transmitter laws that were required to complete the PayPal acquisition.
PayPal's CEO, Peter Thiel, who eBay had said would stay on as head of PayPal after the acquisition, resigned after the stockholder's meeting. eBay executive Matt Bannick will assume all of Thiel's responsibilities. Bannick had been head of eBay's international operations until early September when he was made Senior Vice President, Global Online Payments, a newly created position.
eBay said PayPal will continue to operate as an independent brand. eBay's current payment service, eBay Payments by Billpoint, will complete the phase-out of its operations in the first half of 2003. PayPal's gaming business will be phased out by the end of 2002.
