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Two Australian online retail giants have merged.

Auction site Grays Online has merged with online value vendor DealsDirect under a new CEO, Mark Bayliss.

Grays will be listed under DealsDirect parent company Mnemon, which joined the Australian Stock Exchange in a backdoor listing earlier this year.

The two etailers are expected to have sales of around $500 million.

The new entity will be seven per cent owned by Grays shareholders with fund manager Caledonia having a 25 per cent stake in Grays.

Grays chairman Will Vicars will leave his position to take up a board role with Mnemon.

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