Big deal: Naspers-owned ibibo Group merges with Nasdaq-listed Indian OTA MakeMyTrip
The combination will bring together a bouquet of consumer travel brands, including MakeMyTrip, goibibo, redBus, Ryde and Rightstay
Travel
ibibo Group, an online travel company owned by Johannesburg-based Internet conglomerate Naspers, is merging with Nasdaq-listed MakeMyTrip.
Once the transaction is closed, MakeMyTrip will own 100 per cent of ibibo Group. Naspers and Chinese Internet giant Tencent (which owns a nine per cent stake in ibibo) will become the single largest shareholder in MakeMyTrip, owning a 40 per cent stake, and will contribute proportionate working capital upon closing.
The combination will bring together a bouquet of consumer travel brands, including MakeMyTrip, goibibo (hotels and air aggregator), redBus (online bus ticketing platform), Ryde (ride-sharing platform) and Rightstay (short stay platform). These units together processed 34.1 million transactions during FY2016, according to a statement.
Prior to closing, the US$180 million, 5-year convertible notes issued by MakeMyTrip to Ctrip.com International in January 2016, will also be converted into common equity. This will result in Ctrip owning an approximately 10 per cent stake in the combined entity.
The transaction, expected to close by the end of December 2016, combines the complementary strengths of each business. MakeMyTrip brings in its strong brand, a mix of domestic and outbound hotels and packages business, and a strong position in the air ticketing business. At the same time, ibibo Group — via its brand goibibo and redBus — comes with a strong presence in various fast growing travel segments, including hotels, bus bookings, and air ticketing.
Following the closing of the proposed transaction, Founder Deep Kalra will remain Group CEO and Executive Chairman of MakeMyTrip, while Co-founder Rajesh Magow will continue to remain India chief.
ibibo Founder and CEO Ashish Kashyap will join MakeMyTrip’s executive team as a Co-founder and President of the entity.
“Today’s announcement is a significant step forward for the rapidly growing travel industry in India. We expect this deal to create an even more scalable business with the expertise to transform the booking experience for Indian travellers,” said Kalra.
“Since I founded ibibo in 2007, we have innovated and grown to become one of the leading travel companies in India, providing solutions not just for travellers, but for suppliers too. 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,” Kashyap said.
“India is a key market for Naspers, and this deal reinforces our commitment to the country,” Naspers CEO Bob van Dijk said in the statement . “ibibo and MakeMyTrip have built leading companies through their innovative use of technology to create exceptional experiences for people traveling throughout India and, increasingly, beyond.”
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