Three big European travel sites, Opodo, Go Voyages and eDreams are about to merge into a huge online travel juggernaut. (Via Les Echos, in French.) The deal makes sense because each site is big in a different market: Opodo in the Nordics, Go Voyages in France (a huge market for online travel) and eDreams in Southern Europe. The combined company’s value should be around $500 million.
Go Voyages and eDreams are owned by private equity firms AXA and Permira respectively; Opodo meanwhile is owned by Amadeus, a big publicly traded travel IT company. According to the report, AXA and Permira were already talking about joining up their respective portfolio companies when Amadeus hired JP Morgan to put Opodo up for sale. A three-way merger thus seemed like a natural move to everyone involved.
Even though the merger makes sense, there are big challenges. The two biggest ones are finding management who can execute on a complicated merger in a high-growth, highly competitive industry, and combining all three companies’ IT backend systems (travel is fiendishly tricky technologically).
On the whole the merger makes sense. The three units complement each other nicely and online travel benefits from scale, as one of the main challenges is attracting customers in a sector where competition has bid up prices.
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