‘Baidu nails it again on travel’: Chinese search engine wins from huge share swap between rivals Ctrip and Qunar as industry consolidation continues
China’s online travel market estimated to grow to US$75 billion by 2017 from US$55 billion this year
Chinese online search giant Baidu emerged as the biggest winner from the blockbuster share swap on Monday between Ctrip.com International and rival Qunar, the country’s two largest online travel services providers.
Analysts said that transaction will enable Baidu to quickly expand its online-to-offline (O2O) business as its Maps, Wallet and Nuomi group-buying services are integrated into both Ctrip and Qunar’s platforms.
Alicia Yap, the head of China internet research at Barclays, said in a report on Tuesday that Baidu now has “the most exposure to the China travel industry” among the country’s top internet industry players, which include Alibaba Group and Tencent Holdings.
READ MORE: Baidu-backed travel services provider Qunar brings more Chinese hotels online as network nears completion
Baidu on Monday completed the exchange of its equity stake in Qunar - 178.7 million Class A shares and 11.45 million Class B shares - for 11.49 million newly issued shares of Ctrip. All three companies are listed on the Nasdaq stock market.
The share exchange ratio represented a 36 per cent premium to Qunar’s closing price last Friday, which valued the company at about US$7 billion.
That deal makes Baidu the largest shareholder in Ctrip, with its 25 per cent interest. Ctrip now owns 45 per cent of Qunar and becomes its former rival’s main shareholder.