Expedia to buy rival Orbitz for $1.33 billion
Expedia announced Thursday that it would buy rival online travel site Orbitz for about $1.33 billion, further consolidating the travel booking industry. Shares of Orbitz are up more than 23 percent in premarket trading and Expedia is up 5 percent on the announcement.
A Boeing 787 takes off from George Bush Intercontinental Airport in Houston. Travel booking site Expedia will buy rival Orbitz in a deal worth $1.33 billion, the two companies announced Thursday, Feb. 12, 2015.
Eric Kayne/AP/File
Bellvue, Wash.
听Expedia is buying rival online travel site听Orbitz听for approximately $1.33 billion to extend its reach in the travel-booking industry.
It's Expedia's second major deal in the past month as the industry consolidates. Expedia announced the $280 million acquisition of another rival, Travelocity, in late January.
Orbitz听owns CheapTickets, HotelClub. Expedia owns Hotels.com and Hotwire.
Expedia, based in Bellevue, Washington, will pay $12 per share, a 25 percent premium to the听Orbitz' closing price of $9.62 Wednesday.
The full announcement from Orbitz is below:听
Expedia, Inc.听(Nasdaq:EXPE) announced it has entered into a definitive agreement under which it will acquire听Orbitz Worldwide, Inc.听(NYSE:OWW), including all of听Orbitz Worldwide's听brands, for听$12.00听per share in cash, representing an enterprise value of approximately听$1.6 billion, and a premium of approximately 29% over the volume weighted average share price for the five trading days up to and including听February 11, 2015.
The Boards of Directors of both companies have approved the transaction, which is subject to approval by the shareholders of a majority of听Orbitz Worldwide's听common stock and other customary closing conditions, including applicable regulatory approvals. The Board of Directors of听Orbitz Worldwide听received a fairness opinion from听Qatalyst Partners听and has recommended that its stockholders vote in favor of the merger.
"We are attracted to the听Orbitz Worldwide听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 travelers all over the world," said听Dara Khosrowshahi, President and Chief Executive Officer,听Expedia, Inc.听"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听Orbitz听for Business, theOrbitz Worldwide听team has built a devoted customer base and we look forward to welcoming them to the听Expedia, Inc.听family."
"Our mission at听Orbitz Worldwide听has been to build our brands to be the world's most rewarding places to plan and purchase travel," said听Barney Harford, Chief Executive Officer,听Orbitz Worldwide. "We're excited for听Orbitz Worldwide听to join the听Expedia, Inc.听family and for our teams to work together to further enhance the offerings we provide to our customers and partners."
The boards of both companies have approved the deal, but it still requires a nod from听Orbitz听shareholders.
Orbitz听had said in January that it was considering selling itself.
Shares of听Orbitz听Worldwide Inc., based in Chicago, are up more than 23 percent in premarket trading and Expedia is up 5 percent.
The other big travel booking company is the Priceline Group, which owns sites like Priceline, Booking.com, Kayak and OpenTable. Priceline's stock rose 1.8 percent to $1,078.89 in premarket trading.
While those companies dominate the travel market 鈥� and are taking advantage of quickly-growing markets in developing countries 鈥� they are facing new pressures at home from more-innovative sites like airfare search Hipmunk and last-minute deal site HotelTonight.