Online travel giant Expedia has today (October 2nd) received the green light from Australia's antitrust regulator to buy local rival Wotif.com Holdings Ltd.
The Australian Competition and Consumer Commission (ACCC), which had earlier raised concerns about the deal, said it had noted some accommodation providers' concerns about higher commissions if the deal went ahead, Reuters reports.
However, it added it did not expect the A$699 million (£380 million) deal to substantially lessen competition. "The ACCC found that there has been considerable change in the competitive dynamics of the online accommodation distribution market in recent years," the regulator said in a statement. "The ACCC considered that the acquisition was unlikely to diminish the dynamic nature of the industry."
Although the takeover remains subject to a vote by Wotif shareholders on October 9th—and approval from the competition regulator in New Zealand, where it also operates—clearance by the ACCC effectively means the takeover goes ahead, John O'Shea, a Melbourne-based analyst at Bell Potter Securities, told the Wall Street Journal.
New Zealand's watchdog hasn't raised any concerns and the offer has already secured strong support from Wotif shareholders.
However, despite the ACCC's approval, the Accommodation Association of Australia and the Tourism Accommodation Association say their concerns remain.
Industry spokesman Bradley Woods told ABC: "Currently Expedia is estimated to hold ten per cent of the Australian hotel portal market. With the acquisition of Wotif, Expedia will grow to 45 per cent. Another major competitor, Priceline, is believed to have approximately 40 per cent. With a successful acquisition the two companies may have up to 85 per cent of the Australian market."
Wotif shares had surged 6.5 per cent to $3.29 (£2.04) by 02:11 ET.
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