Expedia Inc.’s proposed acquisition of Orbitz Worldwide was
approved Wednesday by U.S. Department of Justice regulators, who said the
buyout doesn’t pose antitrust issues.
The DOJ said that a six-month probe found no evidence that
the larger company will impose new charges on customers, and that Orbitz
accounts for a “small source of bookings” to airlines, hotels and car rental
companies.
The expansion into travel booking by Google and TripAdvisor was
also a factor in the decision.
“We concluded that Expedia’s acquisition of Orbitz is not
likely to substantially lessen competition or harm U.S. consumers,” the DOJ
said.
Expedia in February said it would acquire Orbitz for about
$1.34 billion. Expedia, the largest online travel agency in the U.S., had just
completed its acquisition of Travelocity in January.
“We look forward to officially welcoming Orbitz Worldwide, and
will make a formal announcement upon closing the transaction,” Expedia said in
a statement on Wednesday. “We have nothing further to share at this time.”
Hotels opposed the proposed transaction. Last month, the
American Hotel & Lodging Association (AH&LA) said that the buyout would
increase prices and hurt small hotel operators. Expedia, Orbitz and Travelocity
combined to account for about three-quarters of U.S. bookings through OTAs,
Phocuswright said in a report released last November. Priceline accounted for
19%.
The AH&LA said Wednesday that it was “disappointed” in
the DOJ’s decision.
“This decision will hurt consumers and small business
owners, and remove choice from the marketplace,” the AH&LA said. “We
continue to believe that increased consolidation is bad for consumers and bad
for business.”
Orbitz shares rose
6.4% in Wednesday trading and closed at its highest price in eight years.
Expedia shares increased 4.9% on Wednesday.