Ctrip to buy Skyscan­ner in $1.7b deal

China Daily (USA) - - BUSINESS - By BLOOMBERG

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.”

ZHEN HUAI / FOR CHINA DAILY

Em­ploy­ees of Ctrip.com In­ter­na­tional Ltd at an on­line travel ex­hi­bi­tion in Nan­jing, Jiangsu prov­ince.

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