Australian Regulator Clears Expedia Takeover Of Wotif.com Holdings

(RTTNews) - The Australian Competition and Consumer Commission or ACCC said Thursday that it will not oppose the proposed acquisition of Australian online travel company Wotif.com Holdings Ltd (WTF.AX) by U.S.-based Expedia, Inc. (EXPE), noting that the proposed acquisition was not likely to result in a substantial lessening of competition.

In early July, Expedia said it agreed to acquire Wotif.com Holdings Limited for A$703 million in cash. The company expects the acquisition to close during the fourth quarter of 2014.

The ACCC had launched an investigation into the deal in August amid concerns within the travel industry that as Wotif.com Holdings was an important source of bookings for some accommodation providers, its removal from the Australian market might result in them paying higher commission rates to online travel agents or OTAs.

Rod Sims, Chairman of ACCC said, "However, the ACCC found that there has been considerable change in the competitive dynamics of the online accommodation distribution market in recent years. This has included new entry by a number of competitors and business models, including Booking.com, which has grown quickly to become the largest OTA in Australia."

Further, the ACCC also noted the rising importance of so-called "metasearch sites" such as TripAdvisor Inc. (TRIP) and Google Hotels Finder, which aggregate the offers of hotels and numerous OTAs in one place for consumers to choose from.

According to the ACCC, TripAdvisor is consistently one of the top two travel-related websites visited by consumers in Australia.

The ACCC said it will outline the reasons for its decision in more detail in a forthcoming Public Competition Assessment.

EXPE closed Wednesday's trading at $84.78, down $2.84 or 3.24 percent on a volume of 2.53 million shares.

On the Australian Securities Exchange, WTF.AX is trading at A$3.30, up A$0.21 or 6.80 percent on a volume of 1.84 million shares.