The Australian Competition and Consumer Commission (ACCC) has given global travel booking giant Expedia the tick of approval to acquire Wotif.com for AU$700 million.
The ACCC initially launched a review into the proposed acquisition in July in fear that the acquisition may substantially lessen competition in the market. There were concerns raised by market participants that Wotif presented an "important source" of bookings for accommodation providers, and, if the company was removed from the Australian market, that it may result in them paying higher commission rates to online travel agents (OTAs).
However, according to ACCC chairman Rod Sims, the ACCC found that due to a number of new entries into the online accommodation market, such as Booking.com, competition will not be substantially lessened by the acquisition.
The ACCC also noted that metasearch sites such as TripAdvisor and Google Hotels Finder, which aggregate the offer of hotels and numerous online travel agents in one place for consumers, is also increasingly facilitating hotels' ability to promote themselves alongside online travel agents, and transact directly with customers.
"The ACCC considered that the acquisition was unlikely to diminish the dynamic nature of the industry. Disruptive developments from smaller OTAs and from companies in related online sectors, such as the metasearch providers, can be expected to constrain Expedia in the future," Sims said.
Expedia launched a takeover bid for Australia's Wotif.com with intentions to pay AU$3.06 per share to acquire all Wotif.com Holdings shares. Shareholders would also receive a special dividend of 24 cents per security.