If you’ve ever planned out any travel trip, then you’re probably well aware of two of the leading online travel booking platforms MakeMyTrip and ibibo. Well, these two Indian behemoths have today announced that they will consolidate and combine their businesses under the umbrella brand of MMYT. This scintillating development will lead to the creation of one of the largest online travel booking platforms that provides a one-stop shop for all Indian travellers and serves as a critical partner for travel industry suppliers. The transaction is expected to close by the end of December 2016.
MakeMyTrip is already a robust and dependable travel planning platform, but this transaction will bring together a cohort of add-on services to further bolster the service. These services will include fast-growing consumer travel brands, including goibibo, redBus, Ryde and Rightstay. This rich ensemble of services of complementary services will further add value to their already strong presence in the country.
Expressing his delight on the merger of the two rapidly scaling travel businesses, Deep Kalra, Chairman and Group CEO of MakeMyTrip, says,
Today’s announcement is a significant step forward for the rapidly growing travel industry in India. We expect this deal to create an even more scalable business with the expertise to transform the booking experience for Indian travellers. I am delighted to be leading such a strong team in our next chapter of high-growth in this dynamic industry.
Rajesh Magow, co-founder and CEO India of MakeMyTrip also shares his excitement for the future and says,
We welcome the ibibo team to the newly expanded MakeMyTrip family. The combination of these two enterprises, with their deep understanding of customer preferences, will help us provide an even stronger value proposition to our users and offer further career growth opportunities for all employees.
ibibo Group is co-jointly owned by Naspers and Tencent who each own 91 per cent and 9 per cent of the company respectively. They’ve together decide to sell their complete stakes to MakeMyTrip in exchange of issuance of new shares by the travel giant. Upon the closing of this deal, MakeMyTrip will own 100 per cent of ibibo Group, while Naspers and Tencent will become the largest stakeholder in MMT. They’ll together own a total of 40 per cent stake, and will contribute proportionate working capital to finalise the transaction.
Also, prior to the closing of this travel booking platform synergy, the US$180 million, 5-year convertible notes issued by MakeMyTrip Limited to its investor Ctrip.com International, Ltd. will also be converted into common equity. Thus, Ctrip will also own about 10 per cent stake in the combined MakeMyTrip entity.
Ashish Kashyap, CEO ibibo Group, also shares his happiness of being merged with the largest travel platform in India. He says,
Since I founded ibibo in 2007, we have innovated and grown to become one of the leading travel companies in India, providing solutions not just for travellers, but for suppliers too. Deep, Rajesh and I saw a great opportunity to join forces, and I am excited that this merger enables all of us to continue a great journey together as the leading travel group in India.
According to Naspers CEO Bob van Dijk,
India is a key market for Naspers, and this deal reinforces our commitment to the country. ibibo and MakeMyTrip have built leading companies through their innovative use of technology to create exceptional experiences for people traveling throughout India and, increasingly, beyond. Today’s announcement underlines the continued ambition of Deep, Rajesh and Ashish and their teams, and I look forward to seeing the future success of this new and even stronger business.
For the closure of this monstrous deal without any hiccups, MakeMyTrip has picked Morgan Stanley as exclusive financial advisor and Latham and Watkins, S&R Associates and Appleby are acting as legal advisors. Whereas ibibo and Naspers has chosen Goldman Sachs as an exclusive financial advisor while Cravath, Swaine & Moore, Trilegal and BLC Roberts will be acting as legal advisors.