Travel and real estate heavyweight Cendant Corp. said Wednesday it will buy travel Web site Orbitz Inc. for about $1.25 billion, making it the No. 2 online travel agency.
Cendant, whose wide range of brands includes Avis Rent A Car, Days Inn and Century 21 Real Estate, will pay $27.50 a share for the travel service controlled by the top five U.S. airlines.
The deal is expected to be completed in November. It has been approved by the boards of both companies but is still subject to regulatory and other approvals, the companies said.
Cendant said it plans to maintain both the Orbitz and its own CheapTickets leisure travel brands. It will also offer corporate travel customers its own Travelport as well as Orbitz for Business. It expects CheapTickets and Travelport to combine their technology platforms and operations to form a common platform with Orbitz.
Online travel sites like Orbitz and InterActiveCorp’s Expedia are competing fiercely for customers and fending off increasing competition from new travel sites and operators of hotels, a lucrative part of the industry.
Orbitz was founded in February 2000 by AMR Corp.’s American Airlines, UAL Corp.’s United Airlines, Delta Air Lines, Northwest Airlines and Continental Airlines. Each kept some of their holdings in Orbitz’s December 2003 initial public offering.
New York-based Cendant owns Galileo International Inc., a computerized reservation system used by travel agents. Galileo and other systems used by traditional travel agencies have suffered with the rise of do-it-yourself Internet travel bookings.
