MakeMyTrip agreed yesterday to buy fellow India-based online travel services platform Ibibo Group in an all-share deal that will make Ibibo’s backers, e-commerce firm Naspers and internet group Tencent, shareholders.
The combined company will be worth $1.8bn, according to a note by financial services firm Morgan Stanley.
Naspers owns 91% of Ibibo, and Tencent 9%, through a holding company called MIH Group. They will receive a 40% stake in MakeMyTrip through the deal, which would place Ibibo’s value at $720m.
Online travel platform Ctrip, which had issued $180m in convertible notes to MakeMyTrip in January this year, will receive a 10% stake in the combined company.
Ibibo was incubated by Naspers and launched in 2007. Since then it has grown through a series of acquisitions, and its properties now include bus ticketing service RedBus, hotel and air travel aggregator Goibibo, bus tracking app YourBus and car sharing platform Ibibo Ryde.
Tencent previously held a 20% stake in MIH, before Naspers invested $250m in Ibibo in February this year.
Founded in 2000, MakeMyTrip provides holiday packages, accommodation booking, travel insurance, car hire, train and bus tickets. It operates subsidiaries in India, the US, the United Arab Emirates, Thailand, Malaysia and Singapore, and floated on Nadsaq in 2010.
MakeMyTrip chief executive and executive chairman Deep Kalra will retain his roles post-acquisition, as will Rajesh Magow, the company’s India CEO. Ashish Kashyap, founder and CEO of Ibibo, will take up the company president position.
Magow said: “ The combination of these two enterprises, with their deep understanding of customer preferences, will help us provide an even stronger value proposition to our users and offer further career growth opportunities for all employees”
Naspers CEO Bob van Dijk added: “India is a key market for Naspers, and this deal reinforces our commitment to the country.
“Ibibo and MakeMyTrip have built leading companies through their innovative use of technology to create exceptional experiences for people traveling throughout India and, increasingly, beyond.”
Morgan Stanley is financial advisor to MakeMyTrip on the deal, while Latham and Watkins, S&R Associates and Appleby are legal advisors. Goldman Sachs is Naspers and Ibibo’s financial advisor, while Cravath, Swaine & Moore, Trilegal and BLC Roberts are their legal advisors.