Date
26 March 2017
By 2030, tourists from China will make up about 40 percent of outbound Asian travelers, taking 1.7 billion trips annually. Photo: Reuters
By 2030, tourists from China will make up about 40 percent of outbound Asian travelers, taking 1.7 billion trips annually. Photo: Reuters

Tencent cements travel foray with US$622 mln offer for eLong

Tencent Holdings Ltd. is offering a 24 percent premium for the rest of Chinese travel company eLong Inc. in a US$622 million deal.

The Chinese internet giant is paying US$18 for each American depositary share, up 24 percent from th stock’s closing price on Friday, according to the Wall Street Journal.

Tencent already owns stakes in eLong that give it effective control of about 15 percent of the company, worth US$521 million before the offer was made.

Data provider Dealogic valued the potential transaction at US$622 million.

A Tencent spokeswoman said the company hopes “to capture the promising potential in the travel sector”.

She also said the offer was part of its strategy to link users with online and offline services.

Tencent owns China’s popular WeChat mobile messaging service, as well as electronic messaging platform QQ and a videogame business that offers a number of popular titles.

The company, based in the southern Chinese city of Shenzhen, is competing with Chinese rivals Alibaba Group Holding Ltd. and Baidu Inc. to capture the growing number of Chinese who use mobile services for everything from buying movie tickets to transferring money with their smartphones.

All three are increasingly investing in travel.

Boston Consulting Group estimates that by 2030, tourists from China will make up about 40 percent of outbound Asian travelers, taking 1.7 billion trips annually, up from 500 million trips in 2012.

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CG/RA

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