Expedia Inc. (EXPE) has entered into an agreement to acquire rival Orbitz Worldwide, Inc. (OWW) for $1.6 billion, or $12 per share. Following the announcement of this major consolidation in the online travel sector, shares of Expedia moved up over 13% whereas those of Orbitz soared more than 21% in the morning trade.
Expedia’s offer reflects a 29% premium to Orbitz average share price for the last five trading days. Though both companies have approved the transaction, approvals from Orbitz shareholders and the regulatory authorities are pending. As per sources, Orbitz had started looking for potential buyers since the beginning of this year.
With brands like Orbitz.com, CheapTickets, ebookers, HotelClub and Orbitz Partner Network in its kitty, Expedia would give tough competition to the industry’s leading players such as The Priceline Group Inc. (PCLN) and TripAdvisor Inc. (TRIP).
Expedia, for some time now, has been on an acquisition spree. Last month, the company purchased the online travel site Travelocity from Sabre Corp. in all-cash deal worth $280 million. In Nov 2014, it acquired Wotif group, an Asia-Pacific based travel company. Earlier, it had purchased the VIA and Trivago brands. It also continues to expand overseas, with special emphasis on the Asian and European markets, to boost revenues.
Expedia – boasting brands such as Expedia.com, Hotels.com, Hotwire.com, Classic Vacations – is an ace global online travel company. The company has set a prudent inorganic growth plan for both domestic and international markets that has played a crucial role in bringing out of a slump.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Be the first to comment