China’s largest online travel agency, Ctrip.com International Ltd (攜程網), is to buy British flight search app Skyscanner Ltd for about US$1.7 billion, the companies said, as it steps up its overseas ambitions.
The travel service provider is to pay ￡1.4 billion, mainly in cash, for the Edinburgh-based firm, they said in separate statements on late on Wednesday.
NASDAQ-listed Ctrip, partly owned by Chinese search giant Baidu Inc (百度), provides online booking for airline and railway tickets as well as hotels, and describes itself as China’s largest travel company.
It generated more than 350 billion yuan (US$51 billion) in gross merchandise value last year, the firm said on its Web site, referring to a measure of online sales.
“Ctrip is the clear market leader in China and a company we can learn a huge amount from,” Skyscanner chief executive Gareth Williams said.
The acquisition took Skyscanner “one step closer to our goal of making travel search as simple as possible for travelers around the world,” he added.
Skyscanner provides similar services to Ctrip and has 60 million monthly active users, mainly in Europe.
Ctrip cofounder and executive chairman Liang Jianzhang (梁建章) said Skyscanner would complement the Chinese company’s positioning “at a global scale.”
Skyscanner is to remain operationally independent with its current management team, the statements 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,” Zhang Min, analyst with Shanghai-based consulting firm Business Connect China (商霖華通), told reporters.
“Ctrip is already the leader in the domestic market in both ticket and hotel booking, so its future growth lies in overseas expansion,” Zhang added.
Average hotel rates were higher overseas, she added, so the deal would help improve Ctrip’s margins.
The Skyscanner purchase, already approved by boards of both firms, is still subject to customary closing conditions and is expected to be completed by the end of the year.
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