Wanda Makes Foray into Online Travel Business with Tongcheng Merger
(Beijing) — A popular online travel service provider said it will acquire a dozen travel agencies owned by real estate and entertainment giant Dalian Wanda Group for an undisclosed amount.
A subsidiary of Tongcheng Network Technology Co. Ltd. said it will incorporate 12 travel agencies owned by Wanda Tourism into its business, according to an internal letter from Wu Zhixiang, chief executive of Tongcheng, to his employees on Sunday.
The deal would be paid through with cash and shares, the letter said, without disclosing how much stake Tongcheng would receive in Wanda's travel business.
But Wu said the merger would push up the privately-owned travel operator's value to 20 billion yuan ($3 billion).
Tongcheng is a relatively small player in China's growing online travel market estimated to be worth 24.9 billion yuan in 2016 by iResearch, a private research group.
Wanda Tourism was established in October 2013 with a focus of building amusement parks and offering organized tours to tap into China's booming travel industry. Wanda invested 3.58 billion yuan, more than half of a funding round worth 6 billion yuan, in Tongcheng in July 2015. However, it is unclear how much stake Wanda owns in Tongcheng.
Wu estimated that Tongcheng will sell over 300 million trips this year.
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