SOUTHLAKE, Texas
-- Sabre answered the question of how it will take on
IAC/InterActiveCorp and Cendant in Europe with an agreement to
purchase LastMinute.com for about $1.08 billion in cash.
The transaction,
subject to LastMinute.com shareholder approval and expected to
close by the end of July, widens Travelocitys reach and enhances
Sabres foray into travel retailing internationally.
Together, we
would have strong positions in the U.K., France, Germany, Italy,
Scandinavia and Spain, said Travelocity President and CEO Michelle
Peluso.
LastMinute.coms
CEO, Brent Hoberman, is expected to become the CEO of the combined
LastMinute.com/Travelocity Europe, reporting to Peluso.
Travelocitys
strategy is to operate multiple brands in Europe, with
LastMinute.com becoming the lead brand in most countries where it
has set up shop, Sabre said.
LastMinute.com,
which had long been considered to be up for sale, made a profit of
about $8 million in the year ended Sept. 30, 2004. It operates in
14 European countries and boasts 13,600 supplier
relationships.
Travelocitys
pending acquisition of LastMinute.com alters the balance of power
in the European market, where online penetration lags behind the
U.S. model.
Expedia has been
considered the top dog in many European markets, and Cendant has
been active, too, buying Gullivers Travel Associates and eBookers,
the latter for about $350 million.
One Expedia
executive recently revealed that the company considers TUI to be
its prime competitor in Europe.
All that may
change with Sabres LastMinute.com acquisition, according to Hugo
Burge, the president of U.S.-based CheapFlights.com
and the vice chairman of its British parent, Cheap
Flights.
Before this,
Expedia was a clear leader, said Burge, whose company has
relationships with both LastMinute.com and eBookers. LastMinute
puts Sabre neck and neck with Expedia in the U.K. and gives
Travelocity a strong footing in Europe.
To contact
reporter Dennis Schaal, send e-mail to [email protected].