Image via Tech in Asia
Baidu, China’s search juggernaut, now owns about 25% of Ctrip, the country’s most popular provider of travel services. These shares make Baidu the single biggest holder of Ctrip stock, according to Sina
The deal is more complicated than it sounds. Before this transaction, Baidu owned a significant stake in Qunar, one of Ctrip’s biggest rivals in the Chinese travel-booking space. Baidu has passed that stake over to Ctrip, meaning Ctrip now holds a 45% stake in one of its main competitors.
“Our business arrangements with Qunar remain in place – all the hotels, the flights you can book so easily through Baidu search, etc. – but we’re now expanding with more partnerships with Ctrip as well,” Kaiser Kuo, international communications director at Baidu, told Tech in Asia.
“Qunar management will remain intact and the two companies
will be operating independently,” Kaiser continues, “Though of course Ctrip is now a very substantial (but still not majority) shareholder in Qunar, and they’ll have some board seats.”
The combined value of the deal is valued at about $3.4 billion dollars, based on the price and number of shares exchanged.
Qunar and Ctrip don’t exactly have a friendly history. There have been accusations of employees posting false complaints on the other company’s website, rumblings of a price war, and as recently as June of this year, Qunar turned down an acquisition offer from Ctrip.
It looks like the companies
have managed to make up since this summer. Either that, or they’ve just come to realise that – after Didi/Kuaidi, Meituan/Dianping, and quite a few more – that mergers between rivals is just how business is being done in today’s Chinese tech industry.