MAKE MY TRIP ,GO IBIO AND OYO UNDER CONTROL CPTRIP, CHINESE COMPANY

31

Oct
2020

MAKE MY TRIP ,GO IBIO AND OYO UNDER CONTROL CPTRIP, CHINESE COMPANY

Posted By : admin/ 2580 21

China’s Ctrip,  the world’s second largest online travel company, is doubling down on India after it announced a deal to increase its ownership of travel company MakeMyTrip to nearly half.

Ctrip will boost its ownership of MakeMyTrip, which is listed on the Nasdaq as Ctrip, to 49 percent through an exchange deal that sees Naspers,  the South African internet giant and early backer of Tencent, swap its shares for 5.6 percent of Ctrip. Ctrip said the investment leaves it with four percent of MakeMyTrip’s voting power.

On paper, each stake is worth around $1.3 billion. MakeMyTrip has a current market cap of $2.69 billion while Ctrip’s current share price gives it an overall valuation of $23.5 billion. In the industry, only Booking Holdings  is valued higher with a current market cap of $84 billion.

There’s a long history between the three companies. Ctrip and Naspers invested $330 million into MakeMyTrip two years ago, a move that saw Naspers deepen its involvement after its portfolio company Ibibo merged with MakeMyTrip in January 2017. Prior to that, Ctrip invested $180 million into the India company in January 2016.

“Over the past years we have witnessed the great achievements of MakeMyTrip, and we are confident that MakeMyTrip will extend its success in the future,” read a statement from James Liang, co-founder and executive chairman of Ctrip.

“We are also delighted to welcome Naspers to become our shareholder. Ctrip will continue to work hard to create greater value to our customers, our partners and all shareholders,” added Ctrip CEO Jane Sun.

MakeMyTrip co-founder and co-CEO Rajesh Magow said the deal would take his company’s partnership with Ctrip “to the next level.”

The deal comes as Naspers prepares to list its international business, which includes advertising giant OLX and stakes in numerous internet companies, in the Netherlands.

Ctrip’s past deals have included the $1.74 billion acquisition of Scotland-based Skyscanner and the undisclosed purchase of U.S.-based travel discovery app Trip.com. It has also invested $463 million in China Eastern Airlines and swapped shares with Chinese rival Qunar.

Today’s share swap deal is forecast to close in this current Q2, according to an announcement from Ctrip.

 

Chinese investors have developed an affinity for India’s online travel agencies (OTA).

On April 26, China’s CTrip bought a 42.5% stake in India’s largest online travel firm MakeMyTrip (MMT) from South Africa’s Naspers in a share-swap deal. Along with an earlier investment, CTrip now owns about half of MMT’s shares.

This is among the biggest moves by a Chinese investor in India’s OTA space and comes at a time when India’s online travel segment is poised to touch $48 billion (Rs3.3 lakh crore) by 2020, compared with less than $10 billion in 2014.

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