In a multi-level strategic partnership, Chinese online travel giant Trip.com Group (formally Ctrip) has entered into a joint venture agreement with leading travel platform TripAdvisor to accelerate its global expansion, per a statement.
Established in 1999, the Shanghai-headquartered Trip, which was listed on the Nasdaq in 2003, counts Ctrip, Skyscanner and Qunar among its subsidiaries.
Trip.com Group subsidiary Ctrip Investment Holding Ltd will hold 60 per cent majority stake in the joint venture and will contribute cash and market expertise.
Meanwhile, TripAdvisor Singapore Private Limited will own the remaining 40 per cent in the JV and will contribute long-term exclusive brand and content license and other assets of its China business.
The joint venture will operate globally as TripAdvisor China. Both companies will also share inventories in travel categories at the joint venture level.
Besides the JV, Trip.com Group and TripAdvisor have also entered into global content agreements for distribution of select TripAdvisor content on the former’s brands including Trip.com, Ctrip, Skyscanner and Qunar.
Also, both parties have entered into a governance agreement which will allow Trip.com Group a nomination right for one TripAdvisor, Inc. Board seat following relevant regulatory approvals.
To secure the board seat, Trip.com Group will acquire up to 6.95 million TripAdvisor shares or TripAdvisor shares valued at $317.6 million through open market transactions within one year following regulatory approvals.
“China is one of the largest and fastest growing travel markets in the world. Trip.com Group, with its established brands and travel market leadership, is the perfect partner to help us achieve our long-term goals in the region,” said TripAdvisor CEO Stephen Kaufer in the statement.
“For TripAdvisor, the joint venture with us enables them to build a world-class China platform serving the needs of the outbound Chinese travelers,” said Jane Sun, CEO of Trip.
“As we expand our footprint overseas, it is important that we offer not only seamless access to global travel inventory, but also quality reviews, opinions and pictures generated by other fellow travelers,” she added.