Trip.com Group Limited (“Trip.com Group”, formerly known as Ctrip.com International Ltd. and TripAdvisor, Inc. (“TripAdvisor”) announced a strategic partnership to expand global cooperation, including a joint venture, global content agreements, and a governance agreement.
First, Ctrip Investment Holding Ltd., a subsidiary of Trip.com Group has entered into a joint venture with TripAdvisor’s subsidiary TripAdvisor Singapore Private Limited. Trip.com Group will be the majority shareholder of the new joint venture entity and will contribute cash and market expertise. TripAdvisor will own 40% of the joint venture and will contribute a long-term exclusive brand and content license and other assets of its China business. Both companies have agreed to share inventories in travel categories at the joint venture level. The joint venture will operate globally as TripAdvisor China.
Second, Trip.com Group and TripAdvisor have entered into global content agreements providing for the distribution of selected TripAdvisor content on major Trip.com Group brands, including Trip.com, Ctrip, Skyscanner, and Qunar.
Furthermore, Trip.com Group and TripAdvisor also entered into a Governance Agreement pursuant to which Trip.com Group will have a nomination right for one TripAdvisor, Inc. Board seat commencing upon the relevant regulatory bodies’ approvals of the transaction. To maintain the Board seat, Trip.com Group shall acquire up to 6.95 million TripAdvisor shares or TripAdvisor shares valued at USD317.6 million through open market transactions within one year following regulatory approvals. TripAdvisor and its controlling shareholder Liberty TripAdvisor Holdings, Inc. (“LTRP”) have separately agreed to provide Trip.com Group with certain information rights with respect to potential transactions for the sale of TripAdvisor Class B shares or LTRP Series B shares, respectively.
The broad strategic partnership pairs Trip.com Group’s market leadership in travel booking capabilities and China travel market expertise with TripAdvisor’s unique brand strength, rich global user-generated content, and points-of-interest database, as well as best-in-class in-destination supply. The strategic partnership marks an important step for Trip.com Group to realize its globalization vision with greater quality services, and for TripAdvisor to further strengthen its position as a global travel leader.
“We are pleased to announce this strategic partnership with Trip.com Group to expand TripAdvisor’s global reach and also help outbound Chinese travelers plan more meaningful trips,” said Stephen Kaufer, president and chief executive officer, TripAdvisor. “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.”