Booking Holdings (BKNG) announced plans on Monday to EU call veto from regulators on acquisition of Etraveli Group, a Swedish online travel agency specializing in flight tracking.
Takeaways
- Booking Holdings, the parent company of Booking.com, announced on Monday that it would appeal to European regulators. vetoed its $1.7 billion deal with Etraveli, a Swedish online travel agency.
- Regulators said the deal would give Booking a disproportionate market share, harm competition and would result in higher costs for hotels and consumers.
- Monday's decision is a rare case of European regulators vetoing a merger, instead of requiring adjustments or changes that eliminate risks to competition before giving the green light.
The European Commission blocked the 1.6 billion euro ($1.7 billion) amount, which was first announced in November 2021. The commission said the deal would give Booking a disproportionate share of the hotel online travel agency (OTA) market, harming competition and leading to “higher costs for hotels and, perhaps, consumers.”
In a statement released shortly afterwards, Booking rejected the request and said it would appeal the EC's veto. The company said European regulators had misinterpreted the flight and accommodation market, saying it was more competitive than they thought. Booking highlighted that other regulators, including the US Federal Trade Commission (FTC) and the UK's Competition and Markets Authority, have approved the deal.
Mathias Hedlund, CEO of the Etraveli Group, expressed his disappointment, saying a deal with Booking “would have benefited European consumers more by reducing prices and increasing competition in the flight sector, while having negligible effects in the travel sector.” hotel OTAs”.
Hedlund committed to further developing the company's partnership with Booking, which has just been extended until the end of 2028.
Monday's decision was a rare case of EU regulators vetoing a merger, instead of requiring adjustments or changes that eliminate risks to competition before giving the green light. According to regulators, the solutions proposed by Booking “were not sufficient to address the competition concerns and to prevent the detrimental effect of the transaction on competition”, he added. causing a veto.
Reservation share the price was up slightly Monday morning. That's an increase of about 50% so far this year.
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Source: investopedia.com