The decision came nearly a year after the e-commerce major came under pressure from activist investors to hive off some of its businesses.
Viagogo was founded in London in 2006 as an online marketplace for ticket resale and currently has a network of more than 60 global websites with customers in 160 countries.
The announcement of the sale resulted in an upward appreciation of eBay shares which rose by a high of 3.7% to trade at $36.43 in the period following the sale.
Reuters reports that in January 2019, activist investors Elliott Management Corp and Starboard Value urged eBay to sell its ticket sales business and eBay Classifieds Group as part of a plan that could double the company’s value.
Elliott valued StubHub between US$3.5 billion and US$4.5 billion, while eBay Classifieds between US$8 billion and US$12 billion.
Following the activist investors’ request, eBay made changes to its board of directors in March.
It later announced a review of its StubHub and eBay Classifieds businesses as part of an agreement with activist investors to avert a proxy contest.
The online seller had been a target of activist investors before. In 2014, Carl Icahn asked eBay to spin off its payment’s unit PayPal, a move which the company followed through in 2015.
The deal, which is expected to close by the end of the first quarter of 2020, comes after the exit of former CEO Devin Wenig in September, following his differences with the company’s revamped board.
In October 2019, eBay forecast its holiday quarter revenue below estimates, as it faces intense competition from Amazon.com and Walmart Inc.
“The core business remains challenged and these developments won’t directly impact it this quarter,” Wedbush analyst Ygal Arounian said on the divestiture impacting eBay’s holiday quarter.
StubHub is an online ticket exchange platform which provides services for buyers and sellers of tickets for sports, concerts, theater and other live entertainment events.
It has grown from the largest secondary-market ticket marketplace in the United States into the world’s largest ticket marketplace.
While the company does not currently disclose its financials, in 2015 it had over 16 million unique visitors and nearly 10 million live events per month.