Internet auction house QXL has announced plans to merge with its German rival Ricardo.de in an all-share deal. The marriage will create Europe's largest internet auction company, with 1.7m registered user.
Called QXLricardo, the combined operation will be headquartered in London with a market value of $1.7bn. According to QXL chief executive Jim Rose, the companies are a good fit: Ricardo enjoys market leadership in Germany, plus an operation in Switzerland where QXL is not present. Both have similar business models, both operate business-to-consumer auctions in addition to consumer-to-consumer, and both recently introduced charges to users.
Integration of the two companies' websites is likely, said Rose. "We'll probably take the best of both," and cited Ricardo's real-time auction technology as an example.
QXL enjoyed a meteoric rise to become one of the UK's biggest internet successes, but in common with other hi-tech stocks, its share price has declined of late as internet shares shed their fashionable shimmer. It also faces serious competition from larger US rivals like eBay, which is mulling a move into the European market.
At the end of 1999, QXL had over 500,000 registered users and had auctioned goods to the value of £5.2m ($7.87m). Ricardo has more than 670,000 registered users in Germany, Switzerland and Britain. Its German site auctioned goods worth Dm48.4m ($22.6m).
News source: BBC Online Business News (UK)