Expedia Inc has agreed a deal to buy Orbitz Worldwide in a transaction for $12 per share in cash.
The acquisition represents an enterprise value of $1.6 billion, a statement says, with a premium of around 29% “over the volume weighted average share price” up to February 11 this year.
Tnooz first learned of a major deal was in the offing in January, with a number of suitors including Expedia tipped as likely contenders if a trade sale was the preferred option.
The pair say both their respective board of directors have approved the deal, although some regulatory approval may be necessary given Expedia’s recent strategic activity in the marketplace.
Less than a month ago, Expedia bought out the remaining parts of rival online travel agency Travelocity which it didn’t already control, in a deal worth $280 million. In a recent earnings call, Expedia stated its intention to replicate the succcess of its Hotels.com loyalty scheme and the acquisition of OWW will help in this ambition.
Still, North America’s online travel agency ecosystem has gone from being a four-horse race just a month ago to now being dominated by two major players, in what is shaping up to the battle of our time: Priceline versus Expedia.
Dara Khosrowshahi, president and CEO of Expedia Inc, says: “We are attracted to the Orbitz Worldwide business because of its strong brands and impressive team. This acquisition will allow us to deliver best-in-class experiences to an even wider set of travelers all over the world.
“From the flagship Orbitz.com brand, to other well-known consumer brands such as CheapTickets, ebookers and HotelClub and the business-to-business brands Orbitz Partner Network and Orbitz for Business, the Orbitz Worldwide team has built a devoted customer base and we look forward to welcoming them to the Expedia Inc. family.”
Orbitz Worldwide CEO Barney Harford adds: “Our mission at Orbitz Worldwide has been to build our brands to be the world’s most rewarding places to plan and purchase travel.
“We’re excited for Orbitz Worldwide to join the Expedia, Inc. family and for our teams to work together to further enhance the offerings we provide to our customers and partners.”
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