Major travel agencies exchange shares , directors

Chinese online travel company Ctrip.com global Ltd on Monday announced a tie-up with rival Qunar Cayman Islands Ltd and its backer Baidu Inc through a share swap. It would also tie the two companies closely to Baidu Inc., the Chinese Internet search company sometimes called the Google of China.

Beyond mixing their ownership, the companies said they would work together “across a broad base of products and services”.

International, Ltd. (ADR) (NASDAQ:CTRP) are gaining by 18.54% to $86.61 in pre-market trading on Monday morning. A statement at the time said it “remain[ed] open to engaging in further discussions with Ctrip as well as other strategic players in our sector” – said negotiations have now borne fruit after Baidu, the majority investor that made ripples when it backed Qunar back in 2011, agreed to give Ctrip a 45 percent voting interest in Qunar in exchange for 25 percent of Ctrip. In the past 52-weeks, the company shares have declined -23.99% and marked new low $100.00 on August 24, 2015. Baidu’s new stake in Ctrip was valued at roughly $3.4 billion based on Friday’s close. The exchange ratio is 1 Qunar ADS to 0.725 Ctrip ADSs. The stock is down -68.39% in this year through last updated price.

The deal is “very good for all three of us”, said Kaiser Kuo, the Baidu spokesman.

Ctrip and Qunar offer users different experiences. Ctrip, which is similar to US online travel services like Expedia, provides full services and is often used by business travelers. “There seems to be more and more impetus for the boutique and niche players to be affiliated with one of the big companies, Baidu, Alibaba and Tencent”. Ctrip and Qunar have been ramping up spending on technology and marketing to keep their position.

Four representatives, counting James Liang and Jane Sun, chairman and chief executive officer, and co-president and chief operating officer of Ctrip, respectively, have been designated to Qunar’s board of directors, and Robin Li and Tony Yip, chairman and chief executive officer, and vice president, head of investments, mergers and acquisitions of Baidu, respectively, have been designated to Ctrip’s board of directors.