Leading domestic online travel portal MakeMyTrip and its’ rival ibibo Merged
Mumbai, Oct 19: Leading domestic online travel portal MakeMyTrip, a Nasdaq-listed firm, on Tuesday announced the acquisition of rival ibibo, in one of the largest consolidations in the space.
The deal size is estimated over $500 million (about Rs 3,400 crore). It was an all-stock deal.
The two together will capture close to half of the domestic online hotel bookings and will dominate the online air ticketing space.
The deal, expected to be completed by December, will need to get the go-ahead of the Competition Commission of India (CCI), the fair trade watchdog.
While MakeMyTrip is the country’s biggest online air ticketing and hotel booking company, ibibo is a close second in the online hotel booking space. It’s market share in online air ticket segment is not known.
When taken together, in the financial year 2015-16, MakeMyTrip and ibibo did 34 million transactions, of which 50 per cent came from redBus, the country’s biggest online bus booking platform, which ibibo had acquired in 2013.
The combined entity of MakeMyTrip and ibibo will now compete against Yatra, Cleartrip and Expedia. The different platforms in the combined entity — MakeMytrip, Rightstay, ibibo, redBus and Ryde — will be retained.
The gain for MakeMyTrip will be it now gets to expand its air and hotel booking and also enter bus booking through redbus and taxi-booking through Ryde, which is also a part of ibibo.
Analysts said after this deal, MakeMyTrip and ibibo jointly will be in a better position to bargain for margins with airlines and hotels.
Following the transaction, MakeMyTrip will own 100 per cent of the ibibo group. However, Naspers, which is ibibo’s majority shareholder, will own 40 per cent stake in MakeMyTrip, becoming its single largest shareholder.
Accordingly, Naspers will contribute proportionate working capital upon the closing of the transaction.
Financials of the deal were not announced.