Summary: A merger between Expedia and Orbitz will start to take place now that the Justice Department has given approval for the two companies to become one.
The Justice Department gave approval for Expedia to buy Orbitz for $1.6 billion despite concerns from the American Hotel & Lodging Association. The news caused Orbitz’s shares to rise 6.4 percent to $11.92. Around 20 percent of their shares had been held in short positions as clearance was not a inevitable conclusion.
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The Justice Department gave reasoning to their decision in their statement yesterday stating, “We found that Orbitz is only a small source of bookings for [airlines, car rental companies and hotels] and thus has had no impact in recent years on the commissions Expedia charges. Many independent hotel operators, for example, do not contract with Orbitz, and those hotels that do often obtain very few bookings from its site.”
Expedia already has Hotels.com, Hotwire, Trivago, and Travelocity under the arms. With this merger, they will also take on CheapTickets, ebookers, and HotelClub. Expedia only recently acquired Travelocity for $280 million in January.
Expedia’s largest online travel rival is Priceline, so there will still be plenty of competition for alternative ways for customers to make travel bookings. Priceline also runs Kayak.com, Booking.com, and a few other travel sites. The online travel business has been changing in the past two years. TripAdvisor introduced their Instant Booking service, whereas Google launched their Hotel and Flight Finder that includes a related booking functionality.
Source: http://nypost.com/2015/09/16/expedia-gets-go-ahead-for-1-6-billion-orbitz-acquisition/
Photo: businessfinancenews.com
