MakeMyTrip rose to $26.48 in early trade on Friday on the Nasdaq, having closed at $25.85 on Thursday.
Naspers will own about 5.6% of Ctrip’s shares, while Ctrip will raise its shareholding to 49% in MMT
The Chinese company will gain access to travel data and MakeMyTrip gets a strong investor with greater synergies than Naspers.
Ctrip.com, China’s largest online travel company, has increased its stake in MakeMyTrip (MMT) to 49 percent through a share swap deal that will see the exit of Naspers from the firm.
Based on the current market capitalization, Ctrip’s 49 percent ownership in the Nasdaq-listed MMT will be valued around $1.3 billion. There will be no fresh fund infusion in the company as a part of the deal.
“We have worked with Ctrip in the past and are excited to take this partnership to the next level. We will leverage this investment to benefit from the tremendous growth potential in travel and tourism between our countries,” said Deep Kalra, MMT chairman and group CEO.
This is Naspers’ second large exit from Indian e-commerce firms. Last May, it sold its 11.8 percent stake in Flipkart to Walmart for $2.2 billion. Naspers owned Ibibo, which was acquired by MMT in 2016. As a part of that transaction, Naspers secured a 40 percent stake in MMT.
“Today’s announcement provides a major boost for MMT and the rapidly growing travel industry in India. This partnership will benefit all our stakeholders including employees, customers and business partners. We look forward to working with the Ctrip team to continue to take our business to the next level,” said Rajesh Magow, co-founder and CEO-India of MMT.
After the transaction, Naspers will own about 5.6 percent of Ctrip’s total shares, while Ctrip will increase its shareholding to 49 percent in MMT.
The companies did not disclose the valuation of the deal. They said the transaction would conclude in the second half of 2019 after the receipt of regulatory approvals.
The Chinese travel giant, which has a market capitalization of $23.5 billion, had first backed MakeMyTrip in January 2016 through an investment of $180 million in convertible bonds.