Expedia Will Acquire Orbitz in $1.6 Billion Deal

In one of the largest Internet acquisitions in years, Expedia has entered into a definitive agreement to buy Orbitz Worldwide for $1.6 billion. As part of the deal, Expedia will shell out about $12 per share in cash for all of Orbitz's brands. The sale price equates to a 29 percent premium over the current share price.

The acquisition appears to be smooth sailing from here. The boards of directors at both companies approved the deal. Of course, it's still subject to a nod by a majority of Orbitz's common stock shareholders and regulatory approvals.

Dara Khosrowshahi, president and CEO of Expedia, made it clear why the company is making the billion-plus-dollar bet on its online travel industry rival: strong brands and an impressive team.

A $278 Billion Pie

"This acquisition will allow us to deliver best-in-class experiences to an even wider set of travelers all over the world," Khosrowshahi said. "From the flagship Orbitz.com brand, to other well-known consumer brands such as CheapTickets, ebookers and HotelClub and the business-to-business brands Orbitz Partner Network and Orbitz for Business, the Orbitz Worldwide team has built a devoted customer base, and we look forward to welcoming them to the Expedia Inc. family."

Once a Microsoft company, Expedia was spun out from Redmond back in 2001. Expedia has been flexing its acquisition muscles lately, also buying Travelocity for $280 million in January. The online travel industry is consolidating as competition heats up for a slice of what market research firm Euromonitor figures is a $278 billion pie.

"Our mission at Orbitz Worldwide has been to build our brands to be the world's most rewarding places to plan and purchase travel," said Barney Harford, CEO of Orbitz. "We're excited for Orbitz Worldwide to join the Expedia Inc. family, and for our teams to work together to further enhance the offerings...

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