In the biggest consolidation move in the online OTA space in India, online travel firm MakeMyTrip has agreed to buy the rival Ibibo Group, which is co-owned by South African technology group Naspers Ltd and Chinese investment firm Tencent. Naspers and Tencent jointly held a 91% and 9% stake in Ibibo respectively.
Additionally, prior to closing, a USD 180 million, 5-year convertible notes issued by MakeMyTrip to Ctrip.com International Ltd in January 2016 will also be converted into common equity, resulting in Ctrip having an approximately 10 per cent stake in the combined entity.
The deal will bring all brands of the Ibibo Group such as Goibibo, redBus, Ryde and Rightstay under MakeMyTrip. Together, Ibibo and MakeMyTrip processed 34.1 million transactions in 2015-16.
MakeMyTrip founder Deep Kalra will remain group chief executive and executive chairman of MakeMyTrip Group and co-founder Rajesh Magow will remain chief executive of MakeMyTrip’s India business. Founder and chief executive of ibibo Group, Ashish Kashyap, will join MakeMyTrip’s executive team as a co-founder and president of the organization.
“We expect this deal to create an even more scalable business with the expertise to transform the booking experience for Indian travellers,” said Kalra.
He also added that the merged entity would retain and work through all brands, including Ibibo and MakeMyTrip.
The transaction is expected to close by the end of December 2016 and is subject to approval by MakeMyTrip shareholders and regulatory approvals.
Commenting on the event, Ashish Kashyap said, “Since I founded ibibo in 2007, we have innovated and grown to become one of the leading travel companies in India, providing solutions not just for travellers, but for suppliers too. Deep, Rajesh and I saw a great opportunity to join forces, and I am excited that this merger enables all of us to continue a great journey together as the leading travel group in India.