Here are ten things to know about the all-stock deal between two of India’s largest travel booking portals:
1. The combined entity will bring together top brands in the consumer travel space in India including MakeMyTrip, Goibibo, redBus, Rightstay and Ryde under one umbrella.
2. Although neither company have indicates the value of the combined entity, early estimates peg the deal at $1.8 billion.
3. With this merger, Naspers and Tencent – which jointly owned the holding company – will be selling ibibo to MakeMyTrip (MMYT) in exchange for new shares by MMYT
4. At the closing, MMYT shareholders will own 60% whereas ibibo shareholders will get a 40% stake, making Naspers and Tencent the single largest shareholder in MakeMyTrip.
5. Deep Kalra and Rajesh Magow will continue their roles as Executive Chairman and India CEO of MakeMyTrip, respectively. Ibibo’s Ashish Kashyap will join the board as President of the group.
6. Ibibo has enjoyed robust performance across business segments, taking transactions to 23.2 million. KPI on the basis of key mobile metrics of MMYT also stood steady at 27.5 million app downloads as of quarter ending June 30. The merger will further strengthen its leadership team and management depth in the consumer travel space in India.
7. In a highly underpenetrated and fragmented market, the merged entity can truly become a one-stop-shop for all Indian travellers.
8. The deal will also make arch rivals partners to fight younger startups like Cleartrip, Booking.com and Expedia in the rapidly growing Indian travel market.
9. The deal signals impending consolidation in the country’s highly competitive consumer internet sector
10. The final transaction is expected to close by the end of December this year, after which Makemytrip will own 100% of ibibo.