It was a helluva ride but the Expedia-Orbitz deal was never in serious jeopardy because there is plenty of competition despite the Expedia-Travelocity-Orbitz consolidation. But if Expedia gets greedy in the future and uses its new powers unwisely, you can bet that regulators will pounce.
It’s a done deal.
Expedia Inc. completed its acquisition Orbitz Worldwide and its roughly seven brands for some $1.3 billion, capping a three-year period in which the Bellevue, Washington-based online travel agency made six major acquisitions. Meanwhile, Orbitz Worldwide, or OWW, delisted its stock from Nasdaq.
In addition to adding Orbitz Worldwide to its portfolio today, in 2015 Expedia also acquired Travelocity for $280 million and became the 75 percent shareholder of its AirAsia joint venture, picking up an additional 25 percent of the enterprise for $86.3 million.
There were two major deals in 2014 as Expedia acquired Wotif in Australia for $658 million and Auto Escape Group for $85 million.
One of Expedia’s most significant purchases was taking a majority stake in hotel metasearch site Trivago in 2013 $632 million, countering the Priceline Group’s acquisition of Kayak.
Tracking the Maneuverings and Its Implications
In the seven months since Expedia announced it intension to acquire Orbitz Worldwide, Skift closely tracked the regulatory process, the maneuverings, and the implications.
Although major segments of the hotel industry opposed the deal and some financial analysts sweated whether it would meet regulatory muster, we told you two months ago — and, in fact, earlier, as well — that the deal would likely get done and why.
Here’s a summary of that coverage:
One of the reasons that the U.S. Justice Department’s Antitrust Division found that there would still be plenty of competition, online and offline, after the Orbitz acquisition is the emergence of TripAdvisor as an up-and-coming hotel-booking site. We detailed TripAdvisor’s stunning transformation as an alternative booking channel for hotels.
With the clock ticking in the Justice Department’s final deliberations on the deal, we reported that TripAdvisor’s role was a key focus of the probe — and that Expedia did not raise Travelocity’s commissions after acquiring it early in 2015. One of the big fears about the Expedia-Orbitz deal is that Expedia will have the market clout to hike commissions.
Just one week after Expedia revealed it sought to add Orbitz Worldwide to the fold, we looked at the experience of a couple of former Expedians, Rich Barton and Spencer Rascoff, and outlined why their real estate site Zillow’s $2.5 billion acquisition of Trulia, after a regulatory review, foreshadowed how the Expedia-Orbitz deal would likewise weave its way through and gain an antitrust nod in the U.S., as well.
Within a month after Expedia announced the Orbitz deal, we interviewed CEO Dara Khosrowshahi, who responded to criticism from the Priceline Group that Expedia’s high growth in its hotel business was unsustainable because it was inorganic.
We will likewise be looking at what Expedia does with its new Orbitz plaything — as will its competitors, the hotel industry and regulators.
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Photo credit: These are Expedia's brands, with Orbitz Worldwide added to the roster. Expedia Inc.