EBay, which has owned PayPal since 2002, will spin off the digital payment company into an independent public company in 2015.
Analysts said the spin-off increases the likelihood that another company could acquire PayPal, which boasts 152 million accounts and processes 9.3 million transactions a day. The e-payment provider faces stiff possible competition from the new Apple Pay.
EBay and PayPal will maintain their relationship through “arm’s-length operating agreements,” a statement said. Current president and CEO John Donahoe predicted on CNBC that eBay will total only 15 percent of PayPal’s business within three years.
“PayPal’s got the ability to provide a payments platform that can be used on the web with merchants all over the world and on mobile devices,” Donahoe said, predicting we “will continue to see profound changes in how consumers shop and how they pay.”
He added that up until now, PayPal worried that any company it did business with was a “competitor to eBay.”
Devin Wenig, president of eBay Marketplaces, will become CEO of new eBay company following the split, while Dan Schulman, former president of American Express’ Enterprise Growth Group, will serve as PayPal’s president, effective immediately, and CEO post-split.
Donahoe and chief financial officer Bob Swan will oversee the separation and serve on the boards of new independent companies but will not hold an executive role at either.
The company expects the transaction to be completed by the second half of next year.