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PayPal: Going, Going, Gone

EBay officially acquires PayPal to offer its customers a more convenient payment system.

Joris Evers, IDG News Service

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EBay has completed the acquisition of online payment company PayPal, the San Jose, California, Internet auction company said Thursday.

The stock-swap transaction, valued at $1.5 billion when announced in July, was approved by holders of about 65 percent of PayPal's common stock, representing more than 99 percent of the shares voting, eBay said in a statement.

Peter Thiel, PayPal's chief executive officer, resigned. His role will be taken over by eBay's senior vice president of global online payments, Matt Bannick, eBay said.

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PayPal, of Mountain View, California, enables businesses and consumers to send and receive credit card and bank account payments via the Internet and e-mail. EBay's Billpoint payment system will be completely replaced by PayPal in the first half of next year.

PayPal will continue to operate as an independent brand and provide its Web Accept online payment processing service to online merchants. However, PayPal's online gaming business will be phased out, eBay said.

The $1.5 billion deal valuation is based on eBay's average closing stock price over the period two days before and after the deal was announced and a fixed exchange ratio of 0.39 eBay shares for each PayPal share, eBay said. The deal also includes about $17 million in acquisition-related costs, eBay said. PayPal went public in February.

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