The online travel scene just got more competitive after Expedia bought Orbitz for US$1.34 billion in cash.
Expedia has agreed to shell out US$12 per share in cash, representing a value of approximately US$1.6 billion, and a premium of approximately 29% over the volume weighted average share price at closing on Wednesday.
Orbitz Worldwide, which includes Orbtiz.com and Cheaptickets.com, was speculated to have been looking to offload for some months as it had been reaching out to potential buyers, news sources claimed.
“We are attracted to the Orbitz Worldwide business because of its strong brands and impressive team. This acquisition will allow us to deliver best-in-class experiences to an even wider set of travellers all over the world,” Expedia Inc president and chief executive officer, Dara Khosrowshahi said.
“From the flagship Orbitz.com brand, to other well-known consumer brands such as CheapTickets, ebookers and HotelClub and the business-to-business brands Orbitz Partner Network and Orbitz for Business, the Orbitz Worldwide team has built a devoted customer base and we look forward to welcoming them to the Expedia, Inc. family.”
The deal marks the second buy-out for Expedia in 2015, having agreed to purchase Travelocity for a mere US$280 million last month. Expedia last year purchased Wotif.com for $703 million, which sparked a battle among Australian hoteliers and regulators.
The Orbitz sale is a move for Expedia inch closer to taking on the largest online travel company, Priceline Group, which owns Booking.com amongst other OTAs.
Meanwhile, Helloworld whose website is powered by Orbitz after entering a strategic alliance agreement in November 2013, said the sale would not affect its agreements moving forward.
The deal is subject to shareholder and US regulators approval.
