According to a joint statement, the latest deal will result in “enhanced collaboration” between the eLong and Expedia, including sharing best practices and cooperation on potential mergers and acquisitions. It also allows Expedia to increase its presence in the Chinese market by amending certain provisions connected to Expedia’s 2011 stake investment in eLong. Under the agreement, Expedia will make an initial payment of US$7 million and a subsequent payment to eLong in November 2015, based on a revenue-sharing arrangement between the parties.
In November last year, Expedia purchased Renren’s 8% stake in eLong for US$72.4 million, boosting its overall interest in the company to more than 50%.
“We believe this new agreement strengthens our relationship with our largest shareholder, and look forward to closer cooperation with Expedia,” said Guangfu Cui, Chief Executive Officer of eLong.
“We are strong believers in the eLong team and their ability to grow and continue to gain share in China. The Chinese travel market is expected to reach over US$105 billion by 2013 with only about 15% of Chinese consumers transacting online, providing a long runway for growth for eLong and Expedia. We are just getting started,” said Dara Khosrowshahi, President & CEO of Expedia.