E-commerce company eBay is planning to repatriate almost $9 billion (€6.5 billion) of its cash held overseas.
The company will have to pay taxes of about $3 billion (€2.17 billion) on the cash, but it needs to do this in order to have funds on hand for any potential acquisitions in the country. This means that there’s probably a big deal cooking between eBay and another company.
eBay is not the first, nor will it be the last company in the United States that chooses to keep some cash overseas to avoid paying taxes. The company does plan to invest in the US to expand its business.
“If you look at our last 15 acquisitions, my guess is ten have been inside the US, maybe 11. Just looking at that versus where our cash is located, you just say, alright it would make more sense to have more cash in the US for mergers and acquisitions,” said John Donahoe, CEO.
The announcement came as the company was reporting its quarterly earnings for the first three months of 2014. eBay’s revenues rose 14 percent year over year, to $4.3 billion (€3.1 billion).
“We delivered a strong first quarter, with enabled commerce volume up 24 percent and revenue up 14 percent. We are committed to delivering sustainable shareholder value and focusing on what matters most to our investors. We are executing our growth plans, capitalizing on the synergies in our portfolio and aggressively executing our $5.0 billion (€3.61 billion) share buyback program. Today, we also announced a non-cash tax charge to facilitate repatriation of $6.0 billion (€4.33 billion) net in foreign earnings, increasing our available U.S. cash and enhancing our financial flexibility,” Donahoe said.