Fair trade regulator CCI has approved online travel portal MakeMyTrip’s proposed acquisition of rival Ibibo group in an equity deal that would create one of the country’s largest online travel firm.
As per the deal announced in October last year, South Africa’s Naspers and China’s Tencent Holdings would sell Ibibo Group to MakeMyTrip in exchange for an issuance of new shares by the latter.
The Competition Commission of India (CCI) has approved the deal, as per the latest update on the regulator’s website.
Post completion of the transaction, MakeMyTrip would own 100 percent of Ibibo Group, and Naspers and Tencent will become largest shareholder in MakeMyTrip, owning a 40 percent stake and will contribute proportionate working capital, MakeMyTrip had announced in October last year.
Additionally, prior to closing, a $180 million (roughly Rs. 1,210 crores), 5-year convertible notes issued by MakeMyTrip to Ctrip.com International Ltd in January 2016 will also be converted into common equity, resulting in Ctrip having an approximately 10 percent stake in the combined entity, it had said.
The combination will bring together a bouquet of consumer travel brands, including MakeMyTrip, goibibo, redBus, Ryde and Rightstay, which together processed 34.1 mm transactions during FY 2016.
MakeMyTrip Founder Deep Kalra will remain Group CEO and Executive Chairman of the company and Co-founder Rajesh Magow will continue to remain CEO India of MakeMyTrip.
Founder and CEO of Ibibo Group, Ashish Kashyap, will join MakeMyTrip’s executive team as a Co-founder and President of the organisation, the company had said.
Mergers and acquisitions beyond a certain threshold requires approval from Competition Commission of India (CCI).