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Johannesburg - Naspers agreed to combine Indian travel operation Ibibo with US competitor MakeMyTrip to help boost its unprofitable e-commerce business and ease a reliance on its investment in Chinese internet giant, Tencent.
Naspers, through a holding company minority owned by Tencent, will sell Ibibo to MakeMyTrip in exchange for new shares, Naspers said in a statement on Tuesday. Naspers and Tencent will together be the largest shareholders in MakeMyTrip, owning 40%.
MakeMyTrip shares soared as much as 56%, the biggest gain in more than six years, and traded 51% higher at $31.20 as of 14:06 in New York. That values the company at $1.3bn. Naspers rose 0.4% by the close in Johannesburg, giving it a market capitalisation equivalent to R994.8bn.
The deal comes as Naspers reviews its portfolio of about 45 media and technology companies around the world, including a 33% stake in WeChat developer Tencent, which is worth about $88bn.
Last week, the company agreed to sell Allegro, a Polish online auction site, for $3.25bn, while its Dubai-based online retailer Souq.com is planning to dispose of a stake of about 30% that would give the company a value of at least $1.2bn, people with knowledge of the matter said last month.
The merger of MakeMyTrip with Gurgaon, India-based Ibibo “is expected to unlock value for customers, supply partners and shareholders, by combining the complementary strengths of each travel group,” Naspers said. The combination will own the brands MakeMyTrip, goibibo, redBus, Ryde and Rightstay.
The deal is expected to close by the end of December and is subject to approval by MakeMyTrip shareholders and regulators.
Naspers is the dominant provider of pay-TV in Africa and also owns online retailer Flipkart in India.
According to Bob van Dijk, CEO of Naspers: "India is a key market for Naspers, and this deal reinforces our commitment to the country. ibibo and MakeMyTrip have built leading companies through their innovative use of technology to create exceptional experiences for people traveling throughout India and, increasingly, beyond. Today's announcement underlines the continued ambition of Deep, Rajesh and Ashish and their teams, and I look forward to seeing the future success of this new and even stronger business."
* Disclaimer: Fin24 is a part of 24.com, a division of Media24, which is owned by Naspers.
