Skyscanner executives have just confirmed of the company's purchase by Ctrip, China's biggest online travel agency. The deal amounts to $1.74 billion, and the full turn-over is expected by December 2016.
Based and grown in Edinburgh, Scotland, Skyscanner has become the biggest airline, hotel and car comparison site with over 60 million active users every month.
The company had its modest beginnings when found in 2001 by I.T. professionals Gareth Williams, Barry Smith and Bonamy Grimes, which started out in a spur of having difficulties with finding cheap flights to ski resorts.
A spokesperson for Skyscanner says, "Today (Ctrip) has signed a definitive agreement with the majority shareholders of Skyscanner Holdings Limited, under which Ctrip will acquire all of such shareholders' shares in Skyscanner and will offer to acquire shares from the remaining shareholders of Skyscanner." He adds, "We're delighted (of the deal)."
While Ctrip now holds the biggest stake and will be the sole owner of Skyscanner, the company will be running under the current management team. This is part of the acquisitions deal.
Current Skyscanner CEO Gareth Williams shares that the company is happy with Ctrip's purchase, saying that both companies "share a common view... that organizing travel has a long way to go to being solved. To do so requires powerful technology and a traveler-first approach." Williams adds that it is expected that Skyscanner will have a wider reach given Ctrip's market of 1.3 billion Chinese citizens living in mainland China alone.
Although now with largely Chinese stockholders, Williams says that Skyscanner will continue to be "operationally independent" given that it will still run under the current management team. The difference now, he adds, is that "We've simply gained access to fantastic insights and technologies from a Chinese company, which will make this proudly British company even stronger and even more successful."
While Skyscanner and Ctrip are both happy with the arrangement, Chancellor Philip Hammond finds it disturbing following the recent acquisitions of British startups by foreign firms. He says that instead of these technology firms "growing to scale," they are lured by bigger companies who have greater access to management and operational funds, and marketing network. He says the UK should take action to help smaller companies get access to government funding.
Skyscanner was initially rumored to be applying for IPO (Initial Public Offering). The company has been mum about the issue, and now with the deal, the rumors prove to be unsubstantiated.
Skyscanner will remain to be based in Edinburgh, Scotland, with 500 of its 800 staff working in the UK. More roles will be open once the deal is fully closed.