MakeMyTrip acquires majority stake in Thailand's ITC group
Online travel services company MakeMyTrip on Tuesday announced acquisition of majority interest in Thailand's hotel company ITC Group for $3.2 million. The group comprises of International Tour Center Co, ITC Bangkok and ITC South.
Online travel services company MakeMyTrip on Tuesday announced acquisition of majority interest in Thailand's hotel company ITC Group for $3.2 million (about Rs 17.8 crore). The group comprises of International Tour Center Co, ITC Bangkok and ITC South.
ITC Group is a hotel aggregator and tour operator in Thailand. The deal will help MakeMyTrip expand its footprint to Thailand which is a favourite international holiday destination.
Of the $3.2 million, $2.2 million will be paid to existing shareholders for sale of shares in ITC and $1 million for new shares in the group.
MakeMyTrip will also acquire the remaining shares of the ITC Group from the existing shareholders in cash over an earn-out period ending December 2016.
A Business Standard article noted that the company was planning to shift its focus from online ticketing to holiday and package tour segment and plans to grow the share of this segment to 50 percent.
This is understandable as companies in the e-commerce space are looking at integrating different dimensions of their business. This would explain MakeMyTrip setting up retail outlets in cities.
"They have two businesses. One is the ticketing portal which is purely a volume game where it's mostly undifferentiated play. The holiday and packages business is where their success depends as the margins are high and hence more profitable," said an industry expert who did not wish to be named.
With inputs from Reuters
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