MakeMyTrip has announced that it has agreed to acquire ibibo Group in an equity deal. Upon closing the acquisition, MakeMyTrip will own 100 per cent of ibibo Group. The latest move will help MakeMyTrip compete against rivals Yatra and Cleartrip.
Naspers and Tencent will become the single largest shareholder in MakeMyTrip, owning a 40% stake and will contribute proportionate working capital upon closing, the homegrown travel portal said. Additionally, prior to closing , the US$180 million, 5-year convertible notes issued by MakeMyTrip Limited to Ctrip.com International, Ltd. in January 2016 will also be converted into common equity, resulting in Ctrip having an approximately 10% stake in the combined entity.
Following the closing of the proposed transaction, Founder Deep Kalra will remain Group CEO and Executive Chairman of MakeMyTrip and Co-founder Rajesh Magow will continue to remain CEO India of MakeMyTrip. Founder and CEO of ibibo Group, Ashish Kashyap, will join MakeMyTrip’s executive team as a Co-founder and President of the organization.
Deep Kalra, Chairman and Group CEO of MakeMyTrip, said in a statement,
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.
Ashish Kashyap, CEO ibibo Group, said in a statement,
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.
The transaction is expected to close by the end of December 2016 and is subject to approval by MakeMyTrip shareholders and regulatory approvals.