China's Ctrip acquires Skyscanner

View of the logo of Chinese online travel agency Ctrip in Shenzhen city, South China's Guangdong province, July 5, 2016. [Photo/IC]

SHANGHAI - China's top online travel agency Ctrip International is to acquire flight comparison site Skyscanner for 1.4 billion British pounds ($1.74 billion) and become its majority shareholder, sources with the companies said Thursday.

Nasdaq-listed Ctrip said the purchase, to be concluded by the end of this year, will be mainly in cash with the balance in shares and loan notes.

A Ctrip statement quoted chairman James Jianzhang Liang as saying that the acquisition will strengthen both companies: Ctrip will consolidate its global position and Skyscanner will get a boost in experience, technology and booking capability.

Ctrip CEO Sun Jie said the acquisition will particularly enhance the company's standing in international air ticketing.

International ticketing accounts for 30 percent of Ctrip's ticket sales, and only 10 percent of clients use Ctrip to book overseas accommodation, according to company sources.

"We are very cautious in acquisitions. We target only the leading companies in the industry with reasonable value estimates," Sun said.

The UK firm is said to have considered an IPO earlier this year, valued at around 1 billion pound.

Skyscanner has around 700 million users mainly to searching for cheap flight deals. CEO Gareth Williams said in another statement that the company will remain operationally independent after the acquisition.

Founded in 1999, Ctrip is China's top online travel agency. In 2015, Ctrip bought its rival Qunar and became No 1 in China.

Ctrip made net revenue of 5.6 billion yuan ($820 million) in the third quarter of 2016, up 75 percent from 2015, according to the company's latest financial report.

In a statement e-mailed to Xinhua, Ctrip says the purchase is important for the company to expand globally, after its acquisition of India's largest online travel agent MakeMyTrip and two American travel agencies -- Ctour Holiday and L&L Travel, both operated by Chinese Americans.

The company has offices in Japan, the Repubic of Korea, and Singapore and its foreign web-sites have 25 million registered users.

"We are striving to become the world's best travel group," said Liang, adding that Ctrip has a good market position in Asia due to its strength in technology, but it needs time to establish its name in other parts of the world.

CEO Sun is counting on China's growing outbound travel market for overseas business growth as more Chinese travel abroad, more countries relax visa rules and air connectivity increases.

More than 120 million Chinese traveled overseas in 2015, according to the China National Tourism Administration.