Ctrip to buy Skyscanner in $1.7b deal
Ctrip.com International Ltd will buy air-ticketing specialist Skyscanner Ltd for about 1.4 billion pounds ($1.7 billion), as China’s biggest online travel company explores ways to expand beyond a home market it already dominates.
Ctrip, whose growth was tied to the phenomenal rise of Chinese tourism, will gain a strong foothold in Europe through the purchase of 13-year-old Skyscanner, one of the region’s larger flight ticketing services with more than 60 million monthly active users.
The Chinese company said the acquisition will help it offer users a more complete array of options that combine air, rail and road travel.
Ctrip announced the deal alongside better-than-expected quarterly revenue and earnings onWednesday.
“The investment will strengthen our positioning on a global scale, serving customers in other parts of the world,” Chairman James Liang told analysts on a post-earnings conference call. “These investments have helped us develop a more comprehensive global travel ecosystem to better serve both our existing and potential customers.”
Ctrip remains largely unknown beyond the confines of the home travel market it currently dominates. It merged with nearest rival Qunar Cayman Islands Ltd in a deal that made search-engine giant Baidu Inc one of its main shareholders.
Bloomberg Intelligence estimated in September that Ctrip handled almost 70 percent of Chinese online travel transactions.
About 10 percent of Chinese travel sales in 2015 were booked online, according to Michelle Ma, an analyst with Bloomberg Intelligence.
It remained unclear whether Ctrip’s latest acquisition was targeted at new foreign customers or designed to help Chinese tourists traveling abroad, said Gartner Inc research director Sandy Shen.
“There’s a lot of Chinese companies moving overseas by either building their own offices or via acquisition,” she said. “But it’s not that easy where you can just buy one company and use it as a channel to sell your own services.”
“This could also be designed to help Chinese consumers when they travel overseas so that it’s easier to search for international flights.”
Employees of Ctrip.com International Ltd at an online travel exhibition in Nanjing, Jiangsu province.