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By David Dolan and Balazs Koranyi
JOHANNESBURG/OSLO (Reuters) – Two of the fiercest rivals in online classifieds, South Africa’s Naspers and Norway’s Schibsted, said they would team up in some emerging markets, including fast-growing Brazil where they have battled each other for years.
The two companies have transformed themselves from traditional print publishers into e-commerce publishers, focusing in recent years on emerging markets such as Brazil where their competition has added to costs, eaten up resources and slowed expansion.
News of the transaction sent shares of both firms to record highs. Naspers, Africa’s most valuable company, is worth more than $50 billion while Oslo-based Schibsted, which generates two-thirds of its profit online, is worth $7 billion.
In a statement late on Thursday, the companies said they will set up online classified joint ventures in Indonesia, Thailand and Bangladesh, as well. Singapore Press Holdings and Norway’s Telenor will also have stakes.
“It’s very important that the two top players in Brazil are joining forces, locking in the market in a way that makes it difficult for new entrants,” said Per Gunnar Nordahl, an analyst at Arctic Securities.
In Brazil, Naspers runs the OLX platform, while Schibsted has bomnegocio.com. Online classifieds are increasingly popular in emerging markets where consumers are using the internet for the first time thanks to cheaper smartphones and tablets.
In Indonesia, Naspers will take 64 percent, with the remainder owned by 701Search, a venture amongst Singapore Press and the two Norwegian companies. In Thailand, 701Search will own 56 percent and Naspers 44 percent.
Shares of Naspers were up 7.8 percent at 1,543.50 rand at 1039 GMT after earlier hitting a record of 1,603.97 rand. Shares of Schibsted initially rose 37 percent to an all-time high before retreating to trade up 27 percent.