China’s two largest travel booking giants Qunar and Ctrip are partnering up to end a long period of rivalry and courtship with a share swap and business alliance.
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Beijing-based Qunar, an online travel search and services firm controlled by Baidu Inc., is to announce a merger with rival Ctrip.com global Ltd., according to Chinese media reports. The company today announced the sale by Baidu, Inc. Ctrip will own ordinary shares of Qunar representing 45 percent of Qunar’s aggregate voting interest?. Ctrip American depositary receipts were up 24% at $92.05 on the Nasdaq Stock Market on Monday morning. The stock, which has a 52-week range of $40.74 – $87.62, has gained 64.76% value year-to-date. You would have thought maybe Alibaba would have made a play for Ctrip, since Baidu had Qunar.
Ctrip.com has a market valuation of $10.6 billion, while the smaller Qunar is valued at $5.2 billion, according to Thomson Reuters data. The exchange ratio represents a 36 percent premium to Qunar’s closing price on Friday, valuing the company at $7 billion.
The deal is “very good for all three of us”, said Kaiser Kuo, the Baidu spokesman.
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It isn’t clear what changed since the summer offer from Ctrip. Ctrip enables business and leisure travelers to make informed and cost-effective bookings by aggregating comprehensive travel related information and offering its services through an advanced transaction and service platform consisting of its mobile apps, Internet websites and centralized, toll-free, 24-hour customer service center. “As the technology leading player in the industry, Qunar has become China’s fourth largest e-commerce company with tremendous growth momentum”, said CC Zhuang, CEO and co-founder of Qunar.
