Expedia, which owns the website that bears its name as well as Hotels.com, Hotwire and other brands, also recently purchased Travelocity. Its rival Priceline Group Inc owns Booking.com, OpenTable and Kayak.
Online travel company Expedia Inc. has won U.S. antitrust approval to buy rival Orbitz Worldwide Inc. for $1.3 billion, the Justice Department said on Wednesday. The department said it did not require any asset sales in exchange for antitrust approval.
“We concluded that Expedia’s acquisition of Orbitz is not likely to substantially lessen competition or harm U.S. consumers,” said Bill Baer, head of the Justice Department’s Antitrust Division.
According to Reuters, the Justice Department announced its decision after the stock market closed, but expectation that the deal would be approved pushed Expedia’s share price from about $119 a share to more than $125 a share in the late afternoon. It traded at $124.68 in after-hours trading. Orbitz’s share price rose from about $11.25 to about $11.90 during regular trading and was at $12 after the regular close.
Expedia, which owns the website that bears its name as well as Hotels.com, Hotwire and other brands, also recently purchased Travelocity. Its rival Priceline Group Inc owns Booking.com, OpenTable and Kayak.
Expedia spokeswoman Sarah Gavin said that the company was pleased to win Justice Department approval. She did not say when the deal would close.
Baer said that during a six-month investigation, the Antitrust Division found no evidence that consumers would face higher charges if the two booking companies merged. They also found that hotels, car rental companies and airlines were unlikely to be harmed.
“The Antitrust Division investigated the concerns that have been expressed about this transaction,” said Baer. “At the end of this process, however, we concluded that the acquisition is unlikely to harm competition and consumers.”
AH&LA disappointed by DOJ approval of Expedia – Orbitz deal
The American Hotel & Lodging Association (AH&LA) issued the following statement on the Department of Justice’s approval of the proposed acquisition of Orbitz by Expedia.
“We are disappointed with today’s announcement by the Department of Justice (DOJ) to approve the proposed acquisition of Orbitz by Expedia. Simply put, this decision will hurt consumers and small business owners, and remove choice from the marketplace.
“By approving this deal, only two players control the online marketplace: Priceline and the behemoth Expedia, now owning Orbitz, Travelocity, Hotels.com, Hotwire, Cheap Tickets, and Trivago. Together, these two players control over 95 percent of the online travel agency (OTA) bookings in the United States. We continue to believe that increased consolidation is bad for consumers and bad for business.
“As we’ve said all along, this transaction will result in significant negative consequences for consumers and also the large number of our members who are small businesses and independent hotels. It could lead to increased distribution costs for independent hotel owners who risk seeing booking commissions rise by double digits.
“We are not alone in our opposition to this deal. Indeed, key members of Congress, including the Chair and Ranking Member of the Senate antitrust subcommittee and vital leaders in the House, along with leading consumer advocates expressed their concerns about consolidation. We encourage these groups to monitor the outcomes of this deal and take appropriate action to protect consumers.
“AH&LA will continue to take action on decisions that we believe will pose harm to our industry and our guests and we will stand up for our small and independent business owners to ensure their voice is heard in an increasingly consolidated marketplace.”
Theodore is the Co-Founder and Managing Editor of TravelDailyNews Media Network; his responsibilities include business development and planning for TravelDailyNews long-term opportunities.
