Ctrip International Ltd. Of China has signed an agreement to buy Skyscanner Holdings Ltd., at the value of $1.7 billion. Ctrip is China’s biggest online travel service provider which is collaborating with this travel search website in order to expand its audience base. As Ctrip acquires Skyscanner, it has become its majority shareholder. Details regarding this agreement were released on Thursday by the officials of Ctrip.
Apart from the majority of shares Ctrip has acquired, it will also offer to buy the shares of the rest of the shareholders of Skyscanner. The purchase which will take place by the end of the year will be transacted mainly through cash. The rest of the amount will be settled between the two companies by acquiring ordinary shares and clearing previous loans. The boards of directors of Ctrip, as well as Skyscanner, have given the green signal to such a form of transaction in the deal. The transaction might vary depending on the customary closing conditions which will take place by the end of 2016.
About both the travel portals
The Skyscanner website enables its users to compare the prices of various flights from different travel websites, in order to attain the best deal for themselves. There are currently 60 million active users per month on this website. This makes it one of the most popular travel portals available on the internet. It is available in over 30 languages, because of which it caters to the needs of its users on an international basis. The travel company previously acquired $159 million from a group of investors in the form of funding. After this, the company has become a public offering.
Ctrip was founded in 1999 and has become the top online travel provider in China since then. In 2015, it bought its rival company Qunar and thus, became the number one travel agency. According to a report, estimates state that Ctrip handles almost 70 percent of the total online travel transactions taking place in China. Ctrip’s shares have come up by 9.2 percent at the value of $44.75 as a result of its extended trading. The rapid growth of Ctrip as a travel portal has a major contribution in the phenomenal development of the Chinese tourism.
Benefits attained when Ctrip acquires Skyscanner
Ctrip believes that through this acquisition, it will be able to offer a better variety of services to its users. The services can be of rail, air, or road travel. As the aims of both the companies are the same, this will help in complementing the services of each other. The management team of Skyscanner states that despite the acquisition, it will operate independently. Ctrip plans to bank upon Skyscanner's international reach. This will extend its market reach to other countries. On the other hand, Skyscanner will take help of the first-hand technology developed by Ctrip. After Ctrip acquires Skyscanner, it will strengthen the long-term growth plan of both the companies.