Skift Take's appeal of the adverse European Commission decision on its merger with eTraveli Group will take years to play out. If self-styled "bigger fish" eTraveli is still around for the taking, it would cost considerably more.

eTraveli Group was left at the altar last week when the European Commission blocked its acquisition by Booking Holdings on antitrust grounds. Booking is appealing, but eTraveli CEO Mathias Hedlund said the $1.8 billion deal would be “no longer in play.”

“We are a bigger fish now than we were at the time,” Hedlund said in an exclusive interview with Skift, referring to when the company signed the merger deal in November 2021. He said eTraveli is 2.4 times larger than before the pandemic.

”Naturally the sales and purchase agreement was dependent on regulatory approval, and should Booking win the appeal, then a new SPA would need to be made,” Hedlund added. He declined to comment on whether eTraveli would receive a break-up fee from Booking. A Booking spokesperson declined to comment on the acquisition price issue.

The two parties agreed to the deal when the European aviation industry was still depressed. Any renegotiation of the acquisition price would have to take into account not only eTraveli’s growth but also that its flights partnership with is responsible for some of that growth.

Another issue is that some of eTraveli Group’s partners might opt out of the arrangements if Booking eventually owns the company.

Founded in 2000, eTraveli Group has a business-to-business-to-consumer segment for flights and its own direct-to-consumer online travel agency business. It also helps to power flights for metasearch businesses with partners such as Google Flights, Group’s Skyscanner, and Booking Holdings’ Kayak. These two segments make up the majority of eTraveli’s business. It also has a third business line, technology solutions, with airlines as some of its customers.

Europe is eTraveli’s largest market, and it claims to process more “orders” — defined as bookings for one or more passengers on one or more flights — than eDreams Odigeo, which itself claims to be the largest flights seller in the world outside China. Hedlund said eTraveli has 10% of global online travel agency market share of flights, and it is stronger in its Europe home base. The company has more than 2,200 employees. launched its own flights business in 2019 in partnership with eTraveli, and the two parties have extended that collaboration through 2028. For many years, was an accommodations-only business, one of the largest in the world.

Hedlund said he hopes Booking wins its appeal. However, eTraveli Group’s private equity owner CVC Capital would retain all its exit options, he said. “Eventually they have to make sure the exit is right, if it is to Booking or is to someone else. That is to be seen,” Hedlund said.

The merger got the go-ahead from UK regulators. But the European Commission argued it would boost’s already imposing hotel market share in Europe because would serve flights cutomers with hotel offers. Hedlund said the decision was “disappointing, and he agrees with Booking’s position on the matter.

“On the other hand, the company [eTraveli Group] is performing so well,” Hedlund said, adding that eTraveli Group will have generated well more than 100 million euros [$105 million] in EBITDA in 2023 at attractive margins. “From an exit point of view, wherever we end up, whether we are going with new private equity or an IPO or Booking in the end, I think all of these are interesting options,” he said.

The following are other important parts of the interview, edited for clarity.

Dennis Schaal: How would you describe this two-year regulatory process? What was it like for you, the company and your employees?

Mathias Hedlund: It was a very cumbersome exercise. But I think the key question is really, how does it affect an organization as a whole? We are more than 2,000 people and for quite a long time, we didn’t really know was it a Plan A or plan B or where are we going? And I would say that I’m very proud of the organization. We have capabilities that are superior, but I think one of our absolute strengths is the way we execute on things.

Schaal: Booking has focused mostly on what you can bring to the table technology-wise. Why is that?

Hedlund: Flights are highly, highly complex, especially on a global scale. The way the airlines are pushing in NDC instead of global distribution system connections, the growth of low-cost carriers at the expense of full service carriers makes it’s quite hard for most to compete within flights because it takes so much of investment.

Schaal: In what sense is your partnership exclusive?

Hedlund: Booking works with nobody else. We work with other people. Booking’s size and the growth prospects means of course we gear our resources towards Booking.

Schaal: Where do things stand now that the European Commission stood in the way of the deal and Booking is appealing that rejection? The process could drag on for years. Are you precluded now from getting acquired by someone else?

Hedlund: CVC Capital is our main owner, and they will look at all different options. eTraveli is performing so spectacularly that there is no stress on CVC to do another exit. But eventually they will have to make sure the exit is right.

Schaal: eDreams Odigeo states that it is the largest flight seller outside of China. Are they wrong?

Hedlund: That might have been right at some point but it is wrong today.

Schaal: Where are your flight volumes coming from?

Hedlund: It’s coming mainly from our own brands (Mytrip, Gotogate, and Flightnetwork). They are the biggest. On top of that is and other partners.

Schaal: You say eTraveli Group is much larger now than when the $1.8 billion deal was signed for in 2021. What should you be valued at?

Hedlund: I cannot comment on that. We are growing faster, we are much bigger. And we have a solid plan for the future. So I think we are a bigger fish than we were at that time.


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Tags: antitrust, booking holdings,, deals, etraveli, european commission, european union, google, google flights, kayak, m&a, mergers, mergers and acquisitions, online travel newsletter, skyscanner

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