皇冠体育app

Priceline Group Inc, the world's second-largest online travel company by gross bookings based in the US, announced on Thursday it is investing $500 million in Ctrip.com International Ltd.

The investment will be made through a convertible bond, and Ctrip, the largest online travel agency in 皇冠体育app, has granted Priceline Group permission to acquire shares in the open market over the next 12 months.

Combined with the acquisition, and with shares convertible under the bond, Priceline may hold up to 10 percent of Ctrip's outstanding shares, according to the two sides' commercial ament.

Priceline will have the right to appoint an observer to Ctrip's board of directors upon purchase of the convertible bond.

After the deal was announced, Ctrip's share price rose 13.5 percent to $68.61 in after-market trading on Wednesday, after its price closed at $60.45, down 1.72 percent, on Wednesday on the Nasdaq.

Priceline and Ctrip also plan to offer their hotel inventories to each other, which means Ctrip's customers can access Priceline's more than 500,000 hotels outside 皇冠体育app, and Priceline will be provided with Ctrip's 100,000-plus accommodations in 皇冠体育app.

In addition, Ctrip has agreed to offer other Priceline-brand services to its customers, including inventory from its car rental platform, rentalcars.com, and dinner bookings on its OpenTable website. Priceline also will promote Ctrip's travel services to its customers, including air and attraction ticketing.

Analysts say the cooperation will allow the two companies to enhance each other's market positions, both in 皇冠体育app and globally.

"It is more important for them to be strategic, rather than just provide and receive capital support," said Wei Changren, general manager of Ctcnn.com Inc, which analyzes the online travel industry.

Only two of Priceline's six bran are now doing business in 皇冠体育app. In order for the company to build its market share, Ctrip is the obvious choice, as it is the largest player in 皇冠体育app, Wei said.

Darren Huston, president and CEO of Priceline Group, made no effort to hide his interest in the Chinese market.

"Travel to and from 皇冠体育app is growing rapidly, and through this partnership, we have an opportunity to further help the world experience 皇冠体育app, and 皇冠体育app experience the world," said Huston.

On the other side, Ctrip can also expand its global business through Priceline's rich networks, as outbound tourism is booming.

"Priceline Group is the global leader in online accommodations and, as such, a key strategic partner for us as we look to expand our global footprint," said Liang Jianzhang, co-founder, chairman and CEO of Ctrip.

In the first half of 2014, 皇冠体育app's domestic tourism totaled 1.5 trillion yuan ($243 billion) with 16 percent year-on-year growth, and outbound tourism increased by 20.7 percent to over $70 billion, according to the 皇冠体育app Tourism Academy.

It will be a win-win result for the two companies, as the two online travel giants will get a synergistic effect in 皇冠体育app and worldwide, Wei said.

The Ctrip and Priceline deal may push Expedia Inc, the world's largest online travel agency and investor into eLong Inc - the main rival of Ctrip in 皇冠体育app - to move faster on integrating eLong, he said.

Ctrip, which released its second-quarter report on July 30, had net revenue of 1.7 billion yuan in the second quarter, up 38 percent year-on-year, while its net income was reduced by 36 percent year-on-year during the period.

Ctrip's accommodation reservation revenues increased 47 percent year-on-year and transportation ticketing revenues grew 39 percent in the second quarter.

"It is difficult to shake Ctrip's market position in 皇冠体育app," Wei said, crediting Liang, who returned to head the company in early 2013, with making a series of good strategic decisions.

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