China’s Ctrip invests in India’s MakeMyTrip
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Chinese online travel giant Ctrip.com International has announced plans to invest US$180 million in MakeMyTrip, India’s largest online travel company.
The potentially significant move will see Ctrip invest in MakeMyTrip via convertible bonds, and the Indian company has also granted Ctrip permission to acquire MakeMyTrip shares in the open market, enabling the Chinese group to own up to 26.6% of the Gurgaon-based OTA.
Ctrip will also have the right to appoint a director to the MakeMyTrip board.
“We are delighted to have Ctrip invest in us. Ctrip is the dominant market leader in the online travel market in China. We believe there are many similarities in the Indian and Chinese online travel markets and we expect this strategic relationship between two market leaders to be mutually beneficial,” said Deep Kalra, founder & group CEO of MakeMyTrip.
James Liang, co-founder & CEO of Ctrip, added; “Today’s announcement marks the beginning of the strategic relationship between Ctrip and MakeMyTrip. Through this transaction, Ctrip has now gained exposure to India’s fast growing online travel market.”
The investment in MakeMyTrip follows a deal signed late last year that led to Ctrip acquiring a 45% stake in its Chinese rival, Qunar. That agreement also saw Qunar’s owner, Baidu, take a 25% stake in Ctrip, while US online travel giant The Priceline Group has also been steadily increasing its stake in Ctrip, having invested an extra US$500m in the Shanghai-based company in December.
The combination of Ctrip and MakeMyTrip – the two largest OTAs in the world’s two most populous countries – could mark the birth of a new global online travel behemoth. In the 2014-15 financial year, MakeMyTrip reported revenues of almost US$300m, while Ctrip’s full-year revenues for 2014 reached US$1.2 billion.
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