(Yicai Global) Jan. 2 -- Two Chinese travel platforms agreed a merger deal at the end of last year after their best-known investors push an agreement.
Tongcheng Tourism Group, which is backed by travel giant Ctrip.com International Ltd., and eLong Inc., backed by Ctrip and internet behemoth Tencent Holdings Ltd., agreed to combine their travel platforms LY and eLong, National Business Daily reported.
The two key investors were the driving force behind the merger and will remain major strategic investors in the new firm, Ctrip said. The pair hope to take the new company, Tongcheng eLong, public, and believe combining their strengths will bolster its entry into the capital market.
LY and eLong combined for a total of 500 million customers and more than CNY100 billion (USD15 billion) in sales last year. Ctrip co-founder Liang Jianzhang and Wu Zhixiang, chief executive of Tongcheng Tourism Group, will co-chair the new firm.
LY mainly sells accommodation and transport tickets and eLong is a leading online travel agency in China with a broad range of hotel partners. Ctrip invested in Tongcheng in April 2014 and has been a strategic partner since. In 2015, Ctrip, Tencent and Plateno Group Ltd. combined to buy a 37.6-percent stake in eLong, making the consortium the firm's largest shareholder.
Tencent's social media and lifestyle platform, WeChat, which offers train tickets and accommodation, is partnered with both LY for travel and eLong for hotels. The merger will allow the app to integrate the two services into one portal.