Domestic travel website operator MakeMyTrip said it would buy rival ibibo Group to capture a larger share of the rapidly growing travel industry in India.
Ibibo, owned by South Africa-based technology group Naspers Ltd and China's Tencent Holdings Ltd, operates brands such as goibibo and redBus.
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The combined entity will become one of the largest travel groups in India.
Naspers and Tencent through their jointly owned holding company (91% owned by Naspers and 9% owned by Tencent), are selling 100% of ibibo to MakeMyTrip in exchange for the issuance of new shares by MakeMyTrip. Naspers and Tencent will become the single-largest shareholder in the Nasdaq-listed MakeMyTrip, owning a 40 per cent stake, and will contribute proportionate working capital upon closing.
The combination of ibibo and MakeMyTrip will bring together leading consumer travel brands, including MakeMyTrip, goibibo, redBus, Ryde and Rightstay.
MakeMyTrip brings its strong brand, robust mix of domestic and outbound hotels and packages business, and the strong position of its air ticketing business. ibibo, through its goibibo and redBus brands, has significant presence in the fast-growing hotel market, bus ticket-booking segment and a fast-growing air ticketing business.
The transaction is expected to close by the end of December 2016, and is subject to approval by MakeMyTrip shareholders, and regulatory approvals.
Commenting on the development, MakeMyTrip Founder Deep Kalra said: "We expect this deal to create an even more scalable business with the expertise to transform the booking experience for Indian travellers. I am delighted to be leading such a strong team in our next chapter of high-growth in this dynamic industry."
Following the closing of the proposed transaction, MakeMyTrip Founder Deep Kalra will remain Group CEO and Executive Chairman of the company and Co-founder Rajesh Magow will continue to remain CEO India of MakeMyTrip, it added.
Founder and CEO of ibibo Group, Ashish Kashyap, will join MakeMyTrip's executive team as a Co-founder and President of the organisation, MakeMyTrip said.
"Deep, Rajesh and I saw a great opportunity to join forces, and I am excited that this merger enables all of us to continue a great journey together as the leading travel group in India," ibibo Group CEO Ashish Kashyap said.
(With PTI inputs)