Prosus to Acquire French Motors Classifieds Platform La Centrale
Prosus, the Amsterdam-based investment subsidiary of South Africa’s Naperss, has entered into an agreement to purchase the French automotive classifieds site La Centrale for €1.1 billion (approximately $1.3 billion). This acquisition is part of Prosus’ OLX division’s strategy to solidify its presence in the burgeoning European e-commerce landscape.
The transaction with U.S. private equity firm Providence Equity Partners is slated for completion by the end of the fiscal year, as per Prosus officials.
This move comes on the heels of Prosus receiving European Union approval for its substantial €4.8 billion merger with Just Eat Takeaway, a collaboration projected to establish the fourth-largest food delivery platform globally.
“We anticipate concluding this deal shortly,” remarked Fahd Beg, the head of investments at Prosus.
The acquisition of La Centrale marks a strategic expansion into the lucrative automotive sector. OLX CEO Christian Gisy emphasized that this purchase aligns seamlessly with the company’s overarching strategy, noting that La Centrale facilitated about 1.6 million vehicle sales last year—accounting for approximately one-third of all used car transactions in France.
Entering a Competitive Arena
This transaction positions Prosus directly against established competitors such as Adevinta of Norway, which controls Leboncoin, France’s foremost classifieds platform.
Leboncoin has long dominated the French used car market, and analysts perceive OLX’s acquisition of La Centrale as a bold initiative to capture a larger segment of this competitive arena.
Germany’s AutoScout24, another significant player in the online automotive market, has expanded its operations across Europe, attracting both dealerships and private sellers with its broad geographical reach.
In contrast, La Centrale has carved out a niche as a focused automotive specialist—an aspect Prosus seeks to enhance with new investments and AI-driven technologies.
Amid the growing competition in the European automotive classifieds sector, Prosus is banking on its global OLX framework combined with La Centrale’s strong brand recognition in France to slowly erode the market clout of Leboncoin and AutoScout24.
According to research from J.P. Morgan, this acquisition is poised to bolster the cash profile of Prosus’ e-commerce portfolio.
Aiming for Scale and Profitability
OLX, already recognized as one of the largest classifieds operators worldwide, reported an impressive 18% surge in annual revenues, reaching $777 million as of June.
The company is now targeting revenue growth of at least 20% alongside achieving a core earnings margin of 50% in the next two to three years.
Prosus contends that La Centrale will play a crucial role in achieving these ambitious objectives while enhancing the overall cash profile of its e-commerce offerings, which have occasionally wrestled with profitability despite rapid expansion. J.P. Morgan concurred, stating in a recent analysis that the acquisition “fortifies Prosus’ cash-generating capabilities while diversifying its market exposure.”
Investing in Technological Advancements
Prosus CEO Fabricio Bloisi has indicated that the company intends to make substantial investments in technological innovations surrounding the new platform.
“I foresee increased investments in AI technology within France,” he asserted, adding that advancements in AI could enhance various aspects, from fraud detection to vehicle pricing algorithms.
This initiative aligns with Prosus’ broader mission of achieving scalability across multiple e-commerce segments. The company is positioning itself not just as a challenger to European automotive platforms but also to diversified classifieds entities like Adevinta, which has been actively consolidating its global operations.
Consolidation Trends in E-Commerce
This acquisition reflects a larger trend of consolidation sweeping through Europe’s e-commerce and classifieds markets. Adevinta, for instance, recently divested non-core assets to sharpen its focus on critical geographical areas, while AutoScout24 has pursued strategic acquisitions to enhance its dealer network.
For Prosus, these strategic maneuvers are also aimed at instilling investor confidence. The company continues to trade at a considerable discount compared to the value of its Tencent stake, prompting pressure to showcase growth outside of China.
Prosus is ambitiously crafting a diversified, pan-European e-commerce empire, marrying the Just Eat merger in food delivery with La Centrale’s strength in the automotive sector.
The efficacy of OLX’s strategy against entrenched rivals in Europe’s online automotive marketplace will hinge on Prosus’ ability to transform scale into sustainable profitability—a challenge that its competitors have wrestled with for numerous years.
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