(Yicai Global) Nov. 7 -- China's largest online travel agency Trip.Com Group, formerly known as Ctrip, and America's biggest social travel website TripAdvisor are to pool their substantial resources and set up a joint venture in China under the TripAdvisor brand.
Shanghai-based Trip will own 60 percent of TripAdvisor China, with its US partner holding the rest. The deal will give both access to each other's inventory, help Trip with its globalization plans and strengthen TripAdvisor's status as a global travel leader, they said in a joint statement yesterday.
Trip will also be able to nominate a person to TripAdvisor's board, subject to regulatory approval. Should that go ahead, Trip will buy 6.95 million shares in TripAdvisor, worth up to USD317.6 million, from the market over a one-year period. That amounts to about 5 percent of the firm's value, according to Yicai Global's calculations.
Needham, Massachusetts-based TripAdvisor said it will provide long-term exclusive brand and content licenses as well as other assets to the JV's Chinese business. The partnership also includes global content-licensing agreements allowing Trip brands, including Trip.com, Qunar and Skyscanner, to distribute TripAdvisor content.
TripAdvisor already has a China brand called Maotuying. The relationship between it and the new JV is not known.
TripAdvisor's stock [NASDAQ:TRIP] fell 4.8 percent to USD38.84 in pre-market trading today after losing almost 0.5 percent in value yesterday, while Trip [NASDAQ:CTRP] was 1.3 percent off at USD34.60 after retreating almost 2 percent yesterday.