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US-based e-commerce group eBay and Norway's Adevinta plan to sell three smaller British units to secure regulatory approval for a long-planned tie-up of their global classified ad businesses, the two companies said on Tuesday.

Britain's Competition and Markets Authority (CMA) said last month Adevinta and eBay would have to resolve the watchdog's concerns before proceeding with their $9.2 billion deal, which would create the world's largest classifieds group.

"The CMA is concerned the merger could lead to a loss of competition between Shpock, Gumtree and eBay's marketplace, with only Facebook Marketplace remaining as a significant competitor," the CMA said in a statement.

In response, Adevinta and eBay said on Tuesday that they had proposed to sell each company's primary classifieds operations in Britain, namely Shpock, Gumtree and Motors.co.uk.

The CMA told Reuters the move "may address the competition concerns our investigation raised. This could reduce consumer choice, increase fees or lower innovation in the supply of platforms that allow people to buy and sell goods online".

It said it had until April 29 to decide whether to accept the proposal and could extend that to June 28 if there were special reasons for doing so.

On a combined basis, the British businesses would have represented less than 5 percent of total consolidated revenue for the merged classified ads company, Adevinta and eBay said.

Under a deal struck last July, Adevinta will acquire eBay's classified ads business in return for $2.5 billion in cash and 540 million shares, making the US company Adevinta's largest shareholder with a 44-percent stake and 33.3 percent of the vote. EBay will also get two seats on Adevinta's board.

Britain accounted for less than 10 percent of the consolidated revenue of eBay's classifieds business and 1 percent of Adevinta's consolidated revenue, Adevinta said.

US group eBay owns UK online auction sites Gumtree and ebay.co.uk while Adevinta owns Shpock.

The CMA's review of the eBay-Adevinta deal is the latest probe of large digital mergers. The CMA said last month that Viagogo must sell StubHub's international business after its $4.05 billion purchase of eBay's ticket-reselling business.

Ebay and Adevinta said on Tuesday that they aimed to close the transaction in the second quarter of 2021, and subject to final ratification by the CMA and regulatory approval in Austria.

E-commerce firm eBay Inc's holiday-quarter revenue beat Wall Street estimates in February, as more homebound buyers flocked to its platform for shopping during the COVID-19 pandemic.

Revenue rose to $2.87 billion from $2.24 billion, beating analysts' average estimate of $2.70 billion, according to IBES data from Refinitiv.

EBay said that it would emerge "stronger" from the COVID-19 crisis after a surge in online shopping.

The global health crisis forced millions of Americans to stay indoors, leading to a jump in online orders for e-commerce companies including online businesses of eBay, Amazon.com Inc and Walmart Inc's .

"We'll be stronger coming out of the pandemic than we were going in," eBay Chief Executive Officer Jamie Iannone said in an interview with Reuters.

The company was benefiting from its updated strategy, Iannone said, which includes drawing shoppers through fashion offerings including sneakers and watches, enabling easier payments and improving its mobile app.

EBay, a marketplace known for unique or hard-to-find inventory, is not focused on copying larger e-commerce rivals, he added.

"Our buyers were very active during the holiday season. In the US, one in 10 online shoppers bought something on eBay. 

In Germany, that number was one in seven, and in the UK, it was one in four," Iannone said on a conference call with analysts.

EBay also projected first-quarter revenue in the range of $2.94 billion to $2.99 billion, above estimates of $2.53 billion, according to IBES data from Refinitiv.

"EBay is increasingly proving that it has the ability to sustain the gains it is seeing from COVID. We expect these trends to increasingly become ingrained in consumer behavior, providing support in 2021," Wedbush analyst Ygal Arounian said.

Annual active buyers grew by 7 percent, to a total of 185 million global active buyers, while refurbished gifts emerged as a top trend for holiday shoppers, the company said.

The company said in January that it has started a process to explore a range of strategic alternatives for its South Korean business, which includes Gmarket, one of the largest online marketplaces in the country.