Cash Deal Corners 22% of Online Travel Market

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NEW YORK (AdAge.com) -- Cendant Corp. has reached an agreement to acquire online travel company Orbitz for $1.25 billion in cash, according to Cendant. The deal will give Cendant 22% of the online travel market share.

It also establishs Cendant as one of the three giants of the online travel industry, along with Travelocity.com and Expedia.com.

Stock deal
Under the terms of the pact agreed to last night by both companies' boards, Cendant will purchase all shares of Orbitz for $27.50 per share in cash. The deal, expected to be finalized in November, is still subject to regulatory and other approvals, the company said.

The deal will fill Cendant's gap in consumer travel and allow the firm to expand its corporate travel offerings. It currently operates leisure travel sites Cheaptickets.com and Lodging.com. Adding Orbitz to those properties will enable Cendant to reach 24 billion Web site visitors per month, according to a Cendant spokesman.

Corporate clients
Although Orbitz is primarily a leisure travel site, it does have approximately 1,200 corporate clients, including Ace Hardware and McDonald's Corp.

Orbitz is profitable and has about $200 million in cash on hand, according to a company statement.

A spokesman said there are no plans to cut the Obritz staff or combine the travel properties.

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