Updated from 7:14 a.m. EDT
NEW YORK -- eBay (EBAY) announced Tuesday a plan in which its eBay marketplace business and PayPal business would be split into two separate public traded companies.
eBay said it expects to complete the transaction by the middle of 2015.
CEO John Donahoe will step down as CEO once the separation is complete. He will serve on the board of least one of the two companies.
Dan Schulman, the president of the enterprise growth group at American Express (AXP) , will be the new president at PayPal, effective immediately. Schulman will become PayPal's CEO once the separation takes place. Devin Wenig, currently the president of eBay Marketplaces, will be the CEO of the new eBay.
"For more than a decade eBay and PayPal have mutually benefited from being part of one company, creating substantial shareholder value," Donahoe said in a press release. "However, a thorough strategic review with our board shows that keeping eBay and PayPal together beyond 2015 clearly becomes less advantageous to each business strategically and competitively."
Activist investor Carl Icahn had been pushing for the split.