Before you read
Subject: Ctrip.com and Qunar, China’s two leading travel websites, yesterday announced a strategic partnership in a deal that creates the country’s biggest…
Excerpt: English text from the archived bilingual edition · Chinese edition
Reference text and retained source material
Ctrip.com and Qunar, China’s two leading travel websites, yesterday announced a strategic partnership in a deal that creates the country’s biggest online travel service and taps into its fast-growing tourism market
Under the terms of the deal, Ctrip.com will own roughly 45 per cent of Qunar, while Qunar’s backer, China search group Baidu, will take a 25 per cent stake in Ctrip.com
Baidu’s US-listed shares rose more than 9 per cent in premarket trading on news of the deal
Shares in Qunar rose 24 per cent, while Ctrip.com shares were up 14.34 per cent
The deal comes just five months after Qunar, which has a market value of $5.2bn, rejected an unsolicited buyout offer from Ctrip.com, which has a market capitalisation of $10.6bn. Both companies are listed on the Nasdaq stock exchange
Intense competition between internet companies in China means market leaders are often under heavy pressure to subsidise consumers as a way of gaining market share. But in recent months, investors have been pushing these companies to merge and reduce marketing costs
Qunar has been the fastest-growing online travel agency in China this year, but the company has incurred heavy losses, and its margins come under pressure, in part because of its discounting and coupon strategy
Earlier this month, the need to consolidate triggered the merger between Meituan.com and Dianping Holdings — which handle “online to offline” services such as group buy, food delivery and restaurant reviews
That followed the merger in February between Alibaba-backed Kuaidi Dache and Tencent’s Didi Dache, the taxi-hailing applications, after the two engaged in a costly subsidy and price war
Online travel is booming in China as a growing middle class spends more on leisure and entertainment. But the sector has also become increasingly competitive, with rival internet giant Alibaba
beefing up its travel offering through its Alitrip website last year. “
“We believe this [transaction] will create greater value to our customers, partners and shareholders in the future,” James Liang, Ctrip’s chief executive and chairman, said in a statement
Robin Li, Baidu chief executive, said: “We are happy with Qunar’s accomplishments, and we look forward to working with the leading players in the industry.”
Products and localization: using this material
Read examples in their screen, voice and use context. Preserve variables, tags and length limits in production work, checking display where a test environment is available.
