MakeMyTrip, an Online travel firm will acquire rival ibibo in an equity deal that will create the largest travel group in India. South Africa’s Naspers and China’s Tencent Holdings are selling ibibo Group to MakeMyTrip in exchange for an issuance of new shares by MakeMyTrip, the company said in a statement.
MakeMyTrip will own 100 percent of ibibo group. South Africa’s Naspers and China’s Tencent, the joint owners of Ibibo Group, will become the single largest shareholder in MakeMyTrip, owning a 40% stake. MakeMyTrip’s share price on the Nasdaq, where it is listed, soared by 44% soon after the deal was announced.
MakeMyTrip after this acquisition will emerge as the largest travel group in the country thus making tough for its rivals like Cleartrip and Yatra. MakeMyTrip is the strongest player in the online airline ticketing space. Ibibo’s core business also is online airline ticketing , but it has a particularly strong presence in online bus ticketing too as it acquired redBus in 2013.
Deep Kalra, who founded MakeMyTrip in 2000 together with Rajesh Magow, said all the entities including MakeMyTrip, redBus and Goibibo will retain their individual identities and will play to their strengths. Mr. Karla said “MakeMyTrip is strong in the air-ticketing and branded 5-4-3 star hotel-booking space, while Goibibo is strong in the budget accommodation space. One of the strategies that could play out is: A lot of bus travellers that redBus has would prefer accommodation offered by our recently launched brand Rightstay that includes villas, cottages, bungalows and apartments. You will see a lot of such interesting synergies unfolding going forward,”
After the merger, Kalra will still remain the group CEO and executive chairman of MakeMyTrip and Magow will continue to remain CEO , who founded Ibibo in 2007, will join MakeMyTrip’s executive team as a co-founder and president.
It would be interesting to see how their rivals react to these developments but this merger will make a big impact on Indian online travel ticketing space for sure.