Brett Molina

USA TODAY

Carl Icahn had to wait several months, but the activist investor got his way.

Online marketplace eBay EBAY announced Tuesday it will split from the mobile payments service PayPal — a spinoff long sought by Icahn — forming two independently traded companies beginning in 2015.

Icahn has clamored for an eBay-PayPal split since February, when he first pushed eBay to spin off PayPal to unlock value for shareholders. The proposal prompted heated exchanges between Icahn and eBay, with the investor slamming CEO John Donahoe for "ineptitude," and eBay founder Pierre Omidyar defending the company from "false and misleading" attacks.

"Activist pressure was certainly one of the factors," RBC Capital Markets analyst Mark Mahaney said of the timing of the split.

As expected, Icahn praised eBay's spinoff. "As I have said in the past and have continued to maintain, it is almost a "no-brainer" that these companies should be separated to increase the value of these great assets and thus to meaningfully enhance value for all shareholders," he said in a statement.

Devin Wenig will become CEO of the new eBay following the split, while American Express executive Dan Schulman will assume the same position with PayPal. Donahoe and eBay CFO Bob Swan will serve on the boards of both companies once the tax-free split takes place during the second half of next year.

In a statement released Tuesday, eBay says after a review with the company's board of directors, the company decided staying together would be "less advantageous" for both eBay and PayPal.

"As independent companies, eBay and PayPal will enjoy added flexibility to pursue new market and partnership opportunities," Donahoe said in a statement. "And we are confident following a thorough assessment of the relationships between eBay and PayPal that operating agreements can maintain synergies going forward."

Shares of eBay closed with gains of 7.5% on Tuesday.

BMO Capital Markets analyst Edward Williams says the split is surprising considering the "protracted debate" earlier this year, but will likely benefit both companies long term.

"The decision to separate the business should allow both to operate more efficiently — allowing each business to pursue the right capital structures and growth trajectories for their businesses," Williams said.

Mahaney said PayPal will emerge a stronger company, calling it the "cash cheetah" to eBay's "cash cow" marketplace business, thanks to the potential for faster growth. The new PayPal will be run by Schulman, who served previous stints in executive roles at American Express, AT&T and Priceline.

Last year, PayPal acquired mobile payments company Braintree as the market begins to surge in popularity. According to eMarketer, mobile proximity payments — physical transactions at retailers made via phone payment — will hit $3.5 billion in the U.S. this year, and balloon to $118 billion by 2018.

Forrester analyst Denee Carrington says PayPal has outgrown its parent company, which acquired the payments service in 2002 for $1.5 billion. The split helps PayPal as it prepares to face off against a flurry of mobile payments competitors, most notably the recently launched Apple Pay.

"The payments landscape is hypercompetitive, the pace of change is accelerating and everyone is gunning for PayPal," says Carrington. "The split will give PayPal greater agility to help it achieve its full potential."

EBAY'S UNCERTAIN FUTURE

While the benefits to PayPal appear clear, it's less certain how eBay, founded nearly 20 years ago, stands to gain from the deal. Mahaney says the growth rate in the online marketplace business has faded in recent years.

"Amazon seems to be getting more and more aggressive in terms of logistics and same-day delivery," Mahaney says. "Then there's the potential for international companies to come in and take share away from eBay."

Mahaney added the spinoff could position eBay as a potential target for acquisition.

Revenue over the past 12 months at eBay jumped 10% to $9.9 billion. However, the company lowered its third-quarter outlook during its earnings call in July. The company is expected to report third-quarter earnings next month. In May, eBay reported a massive data breach, exposing a database containing user information such as names, encrypted passwords and e-mail addresses.

As part of the spinoff, eBay will assume the debt from the parent company, giving it a "less-attractive profile," says S&P Capital IQ analyst Scott Kessler. However, the split from PayPal could give eBay the focus and time to reignite growth in the marketplace.

"I think so much of what eBay had been doing more recently was focused on investing on the PayPal side," Kessler says. "Now they can focus on a slower-growth, more mature business."

Follow Brett Molina on Twitter: @brettmolina23.

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