Chinese travel site Ctrip buys Skyscanner for $1.7 bn
China's largest online travel agency Ctrip will buy British flight search app Skyscanner for $1.7 billion, the companies said, as it steps up its overseas ambitions.
The travel service provider will pay £1.4 billion, mainly in cash, for the Edinburgh-based firm, they said in separate statements late Wednesday.
NASDAQ-listed Ctrip, partly owned by Chinese search giant Baidu, 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 ($51 billion) in gross merchandise value last year, the firm said on its website, referring to a measure of online sales.
Gareth Williams, Skyscanner chief executive, said: "Ctrip is the clear market leader in China and a company we can learn a huge amount from."
The acquisition took Skyscanner "one step closer to our goal of making travel search as simple as possible for travellers around the world", he added.
Skyscanner provides similar services to Ctrip and has 60 million monthly active users, mainly in Europe.
Ctrip co-founder and executive chairman Liang Jianzhang said: "This acquisition will strengthen long-term growth drivers for both companies. Skyscanner will complement our positioning at a global scale."
Skyscanner will remain operationally independent with its current management team, the statements said.
In its third-quarter results, announced Wednesday, Ctrip said it had also acquired "two large US tour operators specialised in serving Chinese travellers", 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, told AFP.
"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.
- Spending spree -
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 2016.
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.
Ctrip shares closed down 2.10 percent to $40.99 on Wednesday before the announcement.
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 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 $450 million in August, a month after acquiring Swiss airline catering company gategroup for $1.5 billion.
Chinese insurer Anbang transformed itself into an international hotelier with a $6.5 billion purchase of 16 luxury properties from hedge fund Blackstone after it failed to take over hotel group Starwood, owner of the Sheraton and Westin brands.