Online travel company Expedia is buying its competitor Orbitz for $1.6 billion in cash. The deal comes just a month after Expedia acquired Travelocity for $280 million.
Expedia will offer $12.00 per share in cash, a premium of about 29 percent over the average share price for the five trading days up to and including February 11, 2015.
With the three companies now consolidated into one entity, Expedia is essentially at the helm of the largest travel player in the online booking space. Orbitz Worldwide includes brands such as CheapTickets, ebookers and HotelClub and the business-to-business brands Orbitz Partner Network and Orbitz for Business.
"We are attracted to the Orbitz Worldwide business because of its strong brands and impressive team. This acquisition will allow us to deliver best-in-class experiences to an even wider set of travelers all over the world," Dara Khosrowshahi, president and CEO of Expedia, Inc, said in the press release.
While the acquisitions represent a drastic amount of consolidation, industry watchers consider them a smart move, as the market has become crowded with a number of similar startups.
"Consolidation you've seen is natural in a highly fragmented marketplace and travel is just that," Khosrowshahi said during a conference call with analysts and reporters.