Expedia Inc.
's (
EXPE
) corporate travel management arm Egencia has agreed to acquire
Oslo, Norway-based leading travel management firm VIA Travel. The
terms of the deal were not disclosed and the closing of the
transaction is subject to various regulatory approvals.
VIA Travel is the largest travel management company in the
Nordic countries. The company offers corporate travel services, as
well as services for corporate groups and meetings, leisure travel,
and marine transport.
The acquisition will allow Egencia to further boost its
corporate travel portfolio and expand into the European online
travel markets, which is still relatively untapped. The deal will
boost cost-efficiency measures and help Expedia to gain market
share. In December, Egencia acquired France-based Traveldoo with a
strategy of keeping separate entities for the two brands and expand
more rapidly across the world.
Expedia is one of the leading online travel companies in the
world and Egencia, the company's corporate travel business, is a
growing part of Expedia Inc.'s overall business. In the fourth
quarter, though Expedia missed estimates on both the top line and
bottom line, Egencia (corporate) segment performed well.
Despite the rising air fares, corporate spending on travel
continues to pick up. Egencia increased at a double-digit
year-over-year in each of the last nine quarters and growth rates
appear sustainable. We expect the business to continue on the
growth path, due to the greater choice of accommodation that
Expedia is now able to offer.
The company will continue to face challenges from players like
Priceline.com
(
PCLN
)
,
Orbitz Worldwide
(
OWW
)
and Travelocity, as well as a growing number of local Chinese
players that could make expansion in the fast-growing Chinese
market difficult.
We have a Zacks Rank of #3 on Expedia shares, which translates
to a short term Hold rating.
EXPEDIA INC (
EXPE
): Free Stock Analysis Report
ORBITZ WORLDWID (
OWW
): Free Stock Analysis Report
PRICELINE.COM (
PCLN
): Free Stock Analysis Report
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