The news: Two leading travel groups in India, MakeMyTrip Limited and ibibo group (owned by global technology group Naspers Limited) have decided to merge together into a single enterprise called MakeMyTrip to provide a one-stop shop for all Indian travellers and serve as a critical partner for Indian travel industry suppliers. The merger will bring together a bouquet of leading consumer travel brands, including MakeMyTrip, goibibo, redBus, Ryde and Rightstay, which together processed 34.1 million transactions during February, 2016.
The benefits for customers: The merger is expected to give value additions for customers, supply partners and shareholders, by combining the complementary strengths of each business. MakeMyTrip contributes its strong brand, robust mix of domestic and outbound hotels, packages business and strong position in the air ticketing business. Ibibo Group, via its brand goibibo and redBus, comes with a strong presence in various fast growing travel segments including hotels, bus bookings and air ticketing.
The designations: Following the closing of the proposed merger, MakeMyTrip founder Deep Kalra will be designated as Group CEO and Executive Chairman of MakeMyTrip and Co-founder Rajesh Magow will continue to remain CEO of India of MakeMyTrip. Founder and CEO of ibibo Group, Ashish Kashyap, will join MakeMyTrip’s executive team as a Co-founder and President of MakeMyTrip.
Noted officers’ comments:
- Deep Kalra, Chairman and Group CEO of MakeMyTrip, said: “Today’s announcement is a significant step forward for the rapidly growing travel industry in India. We expect this deal to create an even more scalable business with the expertise to transform the booking experience for Indian travellers. I am delighted to be leading such a strong team in our next chapter of high-growth in this dynamic industry.”
- Ashish Kashyap, CEO ibibo Group, 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.”
Naspers and Tencent, through their jointly owned holding company (91% owned by Naspers and 9% owned by Tencent), are selling ibibo Group to MakeMyTrip in exchange for an issuance of new shares by MakeMyTrip. Upon closing of the transaction, MakeMyTrip will own 100% of ibibo Group. Naspers and Tencent will become the single largest shareholder in MakeMyTrip, owning a 40% stake and will contribute a proportionate working capital upon closing. The transaction is expected to close by the end of December 2016 and is subject to approval by MakeMyTrip shareholders and regulatory approvals.
Our take: The travel business in India is a rapidly growing sector where there is a huge demand for companies or websites or mobile apps which can enable customers to plan their travel and make travel arrangements. MakeMyTrip and the ibibo group have made a wise decision by merging together to provide a sophisticated and an all – in – one platform for customers which incorporates the best features of the platforms of MakeMyTrip and goibibo. This will definitely improve the customers’ experience and make the process of planning one’s travel less tedious, simple and more enjoyable. Read more on Startups