Makemytrip and Ibibo have agreed to merge in a stock transaction, representing the coming together of India’s largest travel booking portals and presaging what many believe is an impending consolidation in the country’s consumer internet sector.
- Although neither company would indicate the value of the combined entity, people familiar with the transaction estimated it at about $1.8-$2 billion. Another indication of the valuation came from a statement by Makemytrip, which pegged the stake owned by Ctrip at 10%–the Chinese firm had invested $180 million earlier this year.
- The announcement is a significant step forward for the rapidly growing travel industry in India,” Makemytrip Group CEO Deep Kalra .
- Kalra will remain as group chief executive and executive chairman of Makemytrip, and cofounder Rajesh Magow will continue to remain CEO for India. Ibibo Group Founder and CEO Ashish Kashyap, will join Makemytrip as a cofounder and president of the organization.
- The acquisition comes a little over three months after rival Yatra agreed to be acquired by Nasdaq-listed special purpose acquisition firm Terrapin 3 Acquisition Corp in a reverse merger deal, with an enterprise value of $218 million. It also comes eight months after Naspers invested $250 million in Gurgaon-headquartered Ibibo Group.
- According to Kalra, the idea is to focus on getting people to move from offline booking to online booking, “since online travel penetration remains fairly low at about 15% for the accommodation industry and 18% for organized bus industry in India.”