sources trip.com ctrip 1.09b hong usfiorettibloomberg
China’s Trip.com and Ctrip Merge to Create a $1.09B Hong Kong Listing
China’s two biggest online travel agencies, Trip.com and Ctrip, have announced their merger to create a $1.09 billion Hong Kong listing. The deal is expected to create a dominant player in the Chinese travel market and provide a boost to the country’s tourism industry, which has been hit hard by the COVID-19 pandemic.
The Merger
The merger of Trip.com and Ctrip was announced on November 6, 2020, and is expected to be completed in the first quarter of 2021. The new company will be called Trip.com Group Limited and will be listed on the Hong Kong Stock Exchange.
Under the terms of the deal, Ctrip shareholders will receive 0.36 Trip.com shares for each Ctrip share they own. This will result in Trip.com shareholders owning approximately 50% of the new company, while Ctrip shareholders will own approximately 42%.
The remaining 8% of the new company will be owned by a group of investors led by Tencent Holdings Ltd. and other institutional investors.
The Benefits
The merger of Trip.com and Ctrip is expected to create a dominant player in the Chinese travel market, with a combined market share of around 40%. This is expected to provide a boost to China’s tourism industry, which has been hit hard by the COVID-19 pandemic.
The new company will also benefit from the complementary strengths of Trip.com and Ctrip. Trip.com is known for its strong brand recognition and marketing capabilities, while Ctrip is known for its extensive network of travel suppliers and its expertise in technology and data analysis.
The merger is also expected to result in cost savings for the new company, as it will be able to streamline operations and reduce duplication of efforts.
The Challenges
Despite the potential benefits of the merger, there are also some challenges that the new company will need to address. One of the biggest challenges is the ongoing impact of the COVID-19 pandemic on the travel industry.
China’s tourism industry has been hit hard by the pandemic, with international travel virtually non-existent and domestic travel severely restricted. While there are signs of recovery in the domestic market, it is unclear when international travel will resume and how quickly it will recover.
Another challenge for the new company is competition from other players in the Chinese travel market. While Trip.com and Ctrip are the two biggest players in the market, there are a number of other companies that are also vying for a share of the market.
The Future
Despite the challenges facing the new company, there are reasons to be optimistic about its future. China’s tourism industry is expected to recover in the coming years, as the country’s economy continues to grow and more people are able to travel.
The new company will also be well-positioned to take advantage of the growing trend towards online travel booking. As more people turn to the internet to book their travel, companies like Trip.com and Ctrip are likely to see increased demand for their services.
In addition, the new company will have access to a large pool of data on Chinese travelers, which can be used to develop new products and services that meet the needs of this growing market.
Conclusion
The merger of Trip.com and Ctrip is a significant development in the Chinese travel market. The new company will be well-positioned to take advantage of the growing trend towards online travel booking and the recovery of China’s tourism industry.
While there are challenges facing the new company, including the ongoing impact of the COVID-19 pandemic and competition from other players in the market, there are reasons to be optimistic about its future. With its strong brand recognition, extensive network of travel suppliers, and expertise in technology and data analysis, the new company is poised to become a dominant player in the Chinese travel market.
