India's two biggest travel platforms MakeMyTrip and ibibo on Tuesday announced the merger of the companies in a $1.8-billion (approximately Rs 12,000 crore) deal. The venture will function under MakeMyTrip's brand and will include its home stay service Rightstay and ibibo's Ryde ride-sharing service, according to NDTV.
The ibibo group, which is jointly owned by South African technology group Naspers Ltd and Chinese investment firm Tencent, will own majority stake in the combined entity. MakeMyTrip said in a statement that Naspers and Tencent will own 40% stake in the group, and will "contribute proportionate working capital upon [the deal's] closing".
If granted approval by regulators, the agreement will be one of the biggest consolidations in India's online travel agency sector. The deal, expected to be finalised by December 2016, will not bring much change to MakeMyTrip's ranks – its founder Deep Kalra will remain the Group CEO and executive chairman; Rajesh Magow will remain the chief executive of India operations; and ibibo CEO Ashish Kashyap will come on board as co-founder and president.
Kalra called the deal a "significant step forward for the rapidly growing travel industry in India". Magow said, "The combination of these two enterprises...will help us provide an even stronger value proposition to our users and offer further career growth opportunities for all employees."