"Having the leading payment processor fully integrated into the leading e-commerce site brings a great deal more value to both companies," said Legg Mason analyst Tom Underwood. "It also keeps eBay's focus on providing a more full-service offering."

EBay also reported that second-quarter earnings jumped from a year earlier on strong growth in U.S. business.

PayPal, which went public in February, already derives about 60 percent of its business from eBay, where its Web-based cash-transfer service has become the most popular method of payment, eBay said. The remaining 40 percent of PayPal's business occurs primarily among small merchants who present a potential new audience for eBay.

EBay said it would phase out its current payment service, eBay Payments by Billpoint, after the acquisition closes.

The deal values PayPal at about $23.61 per share based on eBay's closing Nasdaq stock price on Friday.

PayPal shares opened up $2.05, or 10 percent, to $22.45 and later rose to $22.74, their highest level in three weeks.

EBay shares opened down $2.55, or 4 percent, at $58 on Nasdaq. Underwood attributed the decline to arbitrage dealing that typically follows an acquisition announcement. "I don't think it's a reflection of the deal," he said.

EBay said the deal would add to its earnings, excluding one-time items, immediately after closing, which is expected late this year. But net income will suffer initially as eBay will book charges for stock-based compensation and amortization of intangible assets of about $4 million and $9 million, respectively, per quarter.

EBay said it would swap 0.39 share for each PayPal share. The $1.5 billion value of the deal includes $18 million in acquisition-related costs, according to eBay's preliminary estimates.

In conjunction with the deal's announcement, eBay released some early details of its second-quarter earnings, which were boosted by strong U.S. and international business.

The company earned $54.3 million, or 19 cents per share, in the quarter, on revenue of $266 million. Earnings excluding unusual items also totaled 19 cents per share, it said.

The company previously estimated revenues would range from $260 million to $265 million and earnings, excluding charges, would be 17 cents per share.

EBay said its results were highlighted by an accelerating U.S. transaction business, which rose 48 percent year-over-year, and year-over-year growth from international operations of 148 percent.