Naspers, Schibsted bury hatchet in Brazil battle

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 Brazil we have been competing head-to-head," Naspers Chief Executive Bob van Dijk told a conference call. "Doing this together is going to be good for all of us."

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.

Consultancy eMarketer has estimated that Brazil has 108 million internet users, more than a third of whom buy online. The companies said the deal is "cash neutral" and didn't give details on savings.

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 both Brazil and Bangladesh, Naspers will split the ventures with SNT, which is jointly owned by Schibsted and Telenor.

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.