Ctrip to buy UK鈥檚 Skyscanner for US$1.74b
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CHINA’S largest online travel agency Ctrip will buy British flight search app Skyscanner for US$1.74 billion to step up its overseas ambitions.
The acquisition will mainly consist of cash, with the rest consisting of Ctrip ordinary shares and loan notes.
The deal, already approved by the boards of both firms, is still subject to customary closing conditions and is expected to be finalized by the end of this year.
Skyscanner helps users compare prices from different travel sites when searching for flights, hotels and rental cars, with about 60 million monthly active users, mainly in Europe.
“Skyscanner will complement our positioning on a global scale and Ctrip will leverage our experience, technology and booking capabilities to Skyscanner’s,” Liang Jianzhang, Ctrip’s co-founder and chairman, said in a statement.
Skyscanner will still be independently run, with the same management team, both sides said.
In its third-quarter results, announced on Wednesday, Ctrip said it had also acquired “two large US tour operators specialized in serving Chinese travelers,” without naming them.
“The Skyscanner deal, as well as the buying of US travel agencies, is part of Ctrip’s effort to expand its overseas business,” said Zhang Min, analyst with Shanghai-based consulting firm Business Connect China.
“Ctrip is already the leader in the domestic market in both ticket and hotel booking, so its future growth lies in overseas expansion.”
Average hotel rates were higher overseas, she added, so the deal would help improve Ctrip’s margins.
Shanghai-based Ctrip merged with another major Chinese online agency Qunar last year to create the country’s biggest Internet travel service. The deal gave Baidu, which controlled Qunar, a 25 percent stake in Ctrip.
Chinese companies have been snapping up overseas assets in the tourism sector from hotels to airlines as higher incomes send more Chinese people on outbound travel.
Conglomerate Fosun bought French holiday company Club Med last year and was also part of a consortium that acquired Canadian entertainment juggernaut Cirque du Soleil.
It also has a stake in British-based tour operator Thomas Cook.
The giant HNA group, best known as the parent of Hainan Airlines, bought nearly a quarter of Brazil’s third-largest airline Azul for US$450 million in August, a month after acquiring Swiss airline catering company gategroup for US$1.5 billion.
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