Download the Q13 News weather app here

Bellevue-based Expedia to buy Orbitz in $1.6 billion deal

This is an archived article and the information in the article may be outdated. Please look at the time stamp on the story to see when it was last updated.

From Wikimedia

NEW YORK — Bellevue-based Expedia said Thursday that it will buy rival online travel booking company Orbitz in a deal valued at $1.6 billion.

Expedia CEO Dara Khosrowshahi said the acquisition will help his company compete with bigger rivals, including Google and TripAdvisor, in the $1.3 trillion online travel market.

Khosrowshahi told analysts in a conference call that Orbitz and its other brands, CheapTickets, ebookers and HotelClub, will help Expedia capture more of the “funnel” of customers searching for travel services online.

“It’s incredibly crowded,” he said. “These types of acquisitions, of companies with a strong brands and a loyal customer base, are really about making sure we can get to (the) top of the funnel.”

Expedia already bought Travelocity in a $280 million deal announced last month. The two companies had had a partnership since 2013 in which Expedia powered Travelocity’s U.S. and Canadian operations.

Under the terms of the deal, Expedia will pay $12 per share in cash for Orbitz, a 25% premium over Wednesday’s closing price.

Expedia said it expects the purchase to boost its full-year earnings by roughly 75 cents per share, though it stressed that the estimate depends on a variety of factors.

The transaction has been approved by the boards of both companies but is subject to approval by shareholders and regulators. The companies said they could not estimate a closing date.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s