Why Yatra’s Broken Deal Won't Help Corporate Travel's Mergers-and-Acquisitions Prospects
Skift Take
As well as the devastating short-term effects, we're now starting to see how coronavirus can equally have longer lasting impacts on the corporate travel sector.
Bad news travels fast, and online agency Yatra’s decision to terminate its merger with Ebix may end up unnerving investors and deter larger firms from buying in an already jittery corporate travel sector.
Yatra, the second biggest online travel agency in India, behind MakeMyTrip,
was valued at $337.8 million when the all-stock transaction deal was announced last summer. The Yatra Business Travel division is the biggest online corporate travel agency in the country.
But last week Yatra said it was terminating the merger, and is now filing a litigation seeking “substantial damages” over alleged breach of deal terms by software firm Ebix,
It’s one of several large-scale acquisitions to fall by the wayside in recent months. Last month, private equity firm Carlyle Group and GIC pulled out of a deal to invest in American Express Global Business Travel, while Travelport and Wex are also disputing a sale.
The Yatra-Ebix falling out will now likely impact further deals, according to one consultant.
“When the deal was announced last year there was a lot of fanfare,” said Gaurav Sundaram, president of India-based ProKonsul Consulting.
“If this had gone through, other people who may have had businesses to sell, or were to be acquired by someone else, would have felt better equipped in their own deal, because such a big deal went through. There’s a sense of disappointment for people who would want to be acquired; they might be thinking their prospects are less now.”
Meanwhile, India could see even fewer investments due to ongoing geopolitical tensions with China, he added. “India has historically been a hub for start-ups, there’s been a lot of deal flows,” said Sundaram.
