eBay announced Tuesday that it will spin off its PayPal business in 2015, and the two will go their separate ways as different companies.
The e-commerce giant said it believes the two companies are better off on their own, despite stating several months ago that it should continue to operate with PayPal, according to PC Magazine.
The move will end an over decade-long relationship between eBay and its online payments business. eBay bought PayPal for $1.5 billion in 2002.
"eBay and PayPal will be sharper and stronger, and more focused and competitive as leading, standalone companies in their respective markets," said John Donahoe, president and CEO of eBay.
The decision to have both companies go their separate ways follows eBay's rejection of an offer made by billionaire investor Carl Icahn earlier this year to have eBay sell PayPal, PC Magazine reported. eBay said splitting from PayPal at the time was not the right decision, adding that it kept an open mind about the idea.
As part of the split, Devin Wenig, president of Marketplaces at eBay, will be the company's new chief executive, while Dan Schulman, former executive of American Express and CEO of Virgin Mobile, will be in charge of PayPal, The Guardian reported.
The two companies are separating at the same time that Apple introduced its Apple Pay mobile payment system.
Additional changes include Scott Schenkel, CFO of eBay Marketplaces, becoming eBay's new CFO. Donahoe and CFO Bob Swan will no longer be executives of eBay or PayPal, and will instead have board positions after the deal is completed, PC Magazine reported.
Both companies expect to complete the deal in the second half of 2015.
