Ebay spinning off PayPal in 2015; both companies to get new CEOs

San Jose, Calif. – eBay Inc. is reversing course on its previous decision to keep its fast-growing online payments business PayPal as part of the company, and is instead spinning the unit off as a separate publicly traded company. The decision will generate $180 million for activist investor Carl Icahn, who attempted to force eBay to spin off PayPal in a public dispute earlier this year. It comes as the payments sector is heating up and generating increased interest as Apple gets set to launch its Apple Pay mobile payments service.



Current eBay CEO John Donahoe will step down after overseeing the separation of the business, and will not have a management role at either eBay or PayPal once the separation is complete. However he may join the boards of the companies. The same is true for eBay CFO Bob Swan.



Devin Wenig, current president of eBay Marketplaces, will be CEO of the new EBay company once the deal is completed.



Dan Schulman, current president of the enterprise growth division at American Express, will be CEO of the new PayPal, and will immediately take over as president.



eBay expects to complete the transaction as a tax-free spinoff in the second half of 2015, subject to customary conditions.



“For more than a decade eBay and PayPal have mutually benefited from being part of one company, creating substantial shareholder value,” Donahoe said. “However, a thorough strategic review with our board shows that keeping eBay and PayPal together beyond 2015 clearly becomes less advantageous to each business strategically and competitively. The industry landscape is changing, and each business faces different competitive opportunities and challenges.”