Competition Commission of India clears MakeMyTrip-ibibo merger

The proposed merger of online travel agencies MakeMyTrip Ltd and ibibo Group has inched closer to completion with the Competition Commission of India approving the transaction.

MakeMyTrip received a letter from the anti-trust watchdog clearing the merger on Friday, the NASDAQ-listed company said in a filing to the US Securities and Exchange Commission.

MakeMyTrip and ibibo, co-owned by South African technology group Naspers Ltd and Chinese investment firm Tencent, had agreed to merge in October 2016 in the biggest consolidation move in India's online travel services sector.

The all-stock deal involves Naspers and Tencent—which own 91% and 9%, respectively, in ibibo Group—selling the firm to MakeMyTrip in exchange for a 40% stake in the combined company. Naspers is likely to own around 36% of MakeMyTrip, making it the single largest shareholder of the country's top online travel services.

Other significant shareholders of MakeMyTrip include SAIF Partners, T Rowe Price, Tiger Global and founder and CEO Deep Kalra.

The transaction is likely to close by 31 January, MakeMyTrip said.

Kalra will remain group CEO and executive chairman and co-founder Rajesh Magow will remain CEO (India) of MakeMyTrip. Ashish Kashyap, founder and CEO of ibibo, will join MakeMyTrip's executive team as president.

The combination of two firms will bring together a bouquet of leading consumer travel brands, including MakeMyTrip, goibibo, redBus, Ryde and Rightstay, which together processed 34.1 million transactions during 2015-16.

The deal will give MakeMyTrip better access to fast-growing travel segments such as hotel booking and bus ticketing through ibibo's brands goibibo and redBus. MakeMyTrip has a much stronger position in the air ticketing business.

MakeMyTrip is already the largest online travel services firm in the country and the merger will strengthen its position while toning down the cutthroat competition. ibibo was especially hitting MakeMyTrip hard with pricing in the hotels category. The other competitors in this segment include Yatra, Cleartrip and Via.com.