Expedia, Inc. (NASDAQ: EXPE), one of the largest travel companies in the world, last week sold a 62.4% stake in eLong (NASDAQ: LONG), the largest shareholder of the Company, to its rival Ctrip (NASDAQ: CTRP) and others for $671 million.
The travel major sold 37.6% stakes to Ctrip for $400 million and rests to the other companies such Keystone Lodging Holdings Limited, Plateno Group Limited, and Luxuriant Holdings Limited totaling the deal price of approximately $671 million.
Expedia earlier emphasized growing its presence in China by picking a 30% stake in eLong in 2004. They raised their share to 62.4%, making them the company’s largest shareholder. The sale of the entire stake to its largest competitor seems to end Expedia’s presence in China.
Though Expedia and Ctrip “have agreed to cooperate with each other to allow their respective customers to benefit from certain travel product offerings for specified geographic markets.”
Expedia, Inc., which has an extensive brand portfolio including leading online travel brands, such as Expedia.com, Hotels.com, Chicago, and Travelocity, will now be cooperating with Ctrip isn’t necessarily good news for its largest rival, Priceline Group.
Currently, eLong, which provides mobile and online accommodations reservations in China, has a strong network of approximately 510,000 properties worldwide will boost Ctrip to increase its growing base in China.