The merger of the two travel biggies of India, makes it a one large travel business in India now.
Bengaluru, Oct 18 - 2108 IST. Red Newswire/--
Mega online travel portal MakeMyTrip has confirmed to buy Ibibo group's business for $720 Million in stock as per the media sources.
This becomes one of the largest merger deals in the travel industry in India. All the subsidiaries and brands under Naspers & Tenbcent will fall under one single umbrella now making it a total business valuation of around $1.8 Billion. The Nasper and Tenbcent-backed Ibibo Group such as Goibibo, redBus, Ryde and Rightstay under MakeMyTrip.
Together, Ibibo and MakeMyTrip processed 34.1 million transactions in 2015-16, the latter said in a statement.
According to a Morgan Stanley note, the combined entity is valued at $1.8 billion.
MakeMyTrip shares rose more than 42% on NASDAQ in early trades on Tuesday, valuing the company at about $1.2 billion.
MakeMyTrip founder Deep Kalra will remain group chief executive and executive chairman of MakeMyTrip Group and co-founder Rajesh Magow will continue to remain chief executive of MakeMyTrip India business. Founder and chief executive of Ibibo Group, Ashish Kashyap, will join MakeMyTrip’s executive team as a co-founder and president of the organization, the statement added.
Naspers and Tencent jointly held 91% and 9% stake in Ibibo respectively. They will be issued new shares in MakeMyTrip and will become the single largest shareholder in MakeMyTrip, owning a 40% stake, and will contribute proportionate working capital once the deal is closed.
“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. I am delighted to be leading such a strong team in our next chapter of high-growth in this dynamic industry,” said Kalra, chairman and Group chief executive of MakeMyTrip.
The transaction is expected to close by the end of December.
“India is a key market for Naspers, and this deal reinforces our commitment to the country. 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. Today’s announcement underlines the continued ambition of Deep, Rajesh and Ashish and their teams, and I look forward to seeing the future success of this new and even stronger business,” said Bob van Dijk, chief executive of Naspers.
Morgan Stanley acted as the financial advisor to MakeMyTrip.
Goldman Sachs acted as financial advisor to Ibibo and Naspers, while Cravath, Swaine & Moore, Trilegal and BLC Roberts served as legal advisors.