Ctrip.com International Ltd, listed on Nasdaq and boasting the place of China’s biggest online travel company, agreed to buy travel search website Skyscanner Holdings Ltd on Wednesday, in a deal that valued the Scotland-based company at about 1.4 billion pounds(approx $1.74 billion). The transaction is expected to close by the end of 2016.
Among Ctrip.com’s offerings are travel services including accommodation reservation, transportation ticketing, packaged tours and corporate travel management. In its efforts at growing bookings for hotels, rental cars and flights for travelers, it has now taken Skyscanner under its wing, with its shares up 9.2 percent at $44.75 in extended trading.
Skyscanner was born as a result of CEO and co-founder Gareth Williams’ frustration with finding cheap flights. It enables users to compare prices from hundreds of travel sites when searching for flights, hotels, and rental cars. It ranks as one of the top online travel brands based on search interest, serving 60 million monthly active users and available in over 30 languages.
Skyscanner was reported to be exploring a sale or an initial public offering. It was valued at $1.6 billion during its funding round in January when it raised 128 million pounds from a group of investors including Malaysia’s sovereign fund, Khazanah Nasional, and Yahoo Japan. It had then acquired a unicorn status in the startup ecosystem.
Commenting on the acquisition, James Jianzhang Liang, co-founder and Executive Chairman of Ctrip.com, said,
Skyscanner is one of the largest travel search platforms in the world. This acquisition will strengthen long-term growth drivers for both companies. Skyscanner will complement our positioning at a global scale, and we will leverage our experience, technology and booking capabilities to help Skyscanner.
According to a statement by the company on Wednesday, the purchase consideration consists mainly cash, with the rest consisting of Ctrip ordinary shares and loan notes. The boards of directors of both companies have approved the transaction and it’s now subject to customary closing conditions. Edinburgh-headquartered Skyscanner’s current team will continue to manage its operations independently as part of the Ctrip.com group.
Speaking about the acquisition, Gareth Williams, co-founder and CEO of Skyscanner, said,
Today’s news takes Skyscanner one step closer to our goal of making travel search as simple as possible for travelers around the world. Ctrip and Skyscanner share a common view – that organizing travel has a long way to go to being solved. To do so requires powerful technology and a traveler-first approach.
For those unaware, Ctrip.com is also recognized to be one of the largest investors in India’s MakeMyTrip. The Chinese travel behemoth has recently pumped in a whopping $180 million through convertible bonds into the online travel agency. Also, MakeMyTrip has now acquired and merged its business with another huge travel agency in the country – ibibo Group. Thus, the bonds issued by Ctrip will be converted into common equity, which will amount to about 10 percent stake of the combined entity.