US online giant eBay Inc on Friday said its board approved the planned spinoff of its PayPal online payments unit, which is set to trade as an independent company on July 20.
The plan calls for the distribution of PayPal stock to eBay shareholders on July 17, with the financial unit starting to trade under the symbol PYPL on July 20.
“EBay and PayPal are two great, special businesses,” eBay president and chief executive officer John Donahoe said.
“As separate, independent companies, eBay, led by Devin Wenig, and PayPal, led by Dan Schulman, would each have a sharper focus and greater flexibility to pursue future success in their respective global commerce and payments markets,” Donahoe said.
The plan, announced last year, came after months of pressure from activist investor Carl Icahn, who had assailed eBay for poor management and claimed that keeping eBay tied with PayPal depressed the value of both units.
EBay acquired PayPal in 2002 for about US$1.5 billion in shares, integrating the payment service that had already been widely used for online auctions.
PayPal over the years has expanded beyond a simple payment mechanism for eBay auctions. However, Icahn and others have argued that PayPal needed to change to compete better in the fast-moving online payments segment.
Last year, PayPal processed US$235 billion in payments and handled 1 billion mobile transactions.
It generated $8 billion in revenue last year and worked with 10 million merchants worldwide.
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