Skyscanner sells to Ctrip for $1.75 billion

Chinese online travel giant Ctrip has made a huge move into the international marketplace with a $1.75 billion takeover of travel search site Skyscanner.

The deal, which is a combination of mostly cash and then some Ctrip stock to Skyscanner shareholders, is expected to close within the next four weeks.

Ctrip’s intentions behind the deal are clear, with co-founder and executive chairman James Liang saying the acquisition will “complement our positioning at a global scale”.

The deal follows the company’s $180 million investment in Indian online travel agency MakeMyTrip earlier this year and its recent backing of three tour operators in the US.

Skyscanner was also busy in January this year when it secured a $192 million funding round from global fund manager Artemis, investment provider Baillie Gifford, Malaysian government funding house Khazanah National Berhad, online specialist Virtruvian Partners and Yahoo Japan.

The investment pegged the company’s valuation in the region of $1.6 billion.

Sequoia Capital was also a financial backer of Skyscanner back in 2013.

CEO and co-founder Gareth Williams says Skyscanner, which will remain an independently run division of Ctrip, can “learn a lot” from its new owner, not least because he feels that the business has plenty of room for growth.

“Organising travel has a long way to go before being solved,” he says, but to help do so “requires powerful technology and a traveller-first approach”.

Skyscanner has around 60 million monthly users and is available in 30 countries, with Europe its strongest market.

By amazing coincidence, Ctrip’s deal to acquire Skyscanner comes almost four years to the day since the Priceline Group bought Kayak, and for a similar amount at $1.8 billion.

Some speculators argued that Skyscanner might make a handy target for the Priceline Group to shore up its metasearch business in Europe and Asia-Pacific, where Skyscanner is begininng to make in-roads.

In a way, though not directly, it has.

The Priceline Group has a minority stake (15%) in Ctrip following two significant investments ($500 million and $250 million) in the company over the course of the last two years.

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