MakeMyTrip acquires rival travel booking platform Ibibo

MakeMyTrip and Ibibo are undoubtedly the most reliable go-to online travel booking platforms for millions of users. Well, the travelling platforms are about to get bigger. These two leading travel groups in India - MakeMyTrip and Ibibo Group - have announced a merger, which will bring a plethora of add-on services to MakeMyTrip and further bolster its services.

The merged entity is expected to be one of the largest online travel booking platforms in the country that will provide one-stop destination for all Indian travellers and serve as a critical partner for travel industry suppliers.

Both the companies are yet to confirm the value of the merged entity, but it is estimated to be about $1.8-$2 billion, according to the people familiar with the report.

The deal will bring Ibibo and all its brands, including Goibibo, redBus, Ryde, and Rightstay under the umbrella of MakeMyTrip.

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.

Ibibo Group is co-jointly owned by Naspers and Tencent, owning 91 percent and 9 percent of the company respectively. However, after selling their complete stakes to MakeMyTrip, they will become the largest stakeholder in MMT, together owning a 40 percent stake.

China’s Ctrip, which in January invested US $180 million in MakeMyTrip through 5-year convertible bonds, will also be converted into common equity, where Ctrip will own a stake of around 10 percent in the merged entity.

Naspers CEO Bob van Dijk said, "India is a key market for Naspers, and this deal reinforces our commitment to the country. Ibibo and MakeMyTrip have built leading companies through their innovative use of technology to create exceptional experiences for people traveling throughout India and, increasingly, beyond. Today’s announcement underlines the continued ambition of Deep, Rajesh and Ashish and their teams, and I look forward to seeing the future success of this new and even stronger business."

Morgan Stanley is the financial advisor to MakeMyTrip and for Ibibo and Naspers, Goldman Sachs will be the financial advisor. The transaction is expected to close by the end of December 2016.