Beijing Utour International Travel Service Co, one of China's top outbound travel agencies, announced on Monday it is buying 100 percent of the wholesale travel operator Huayuan MNB for 2.6 billion yuan ($397.5million).
Ctrip.com International Ltd, the largest online travel agency in China and the biggest shareholder in Huayuan, will also become a shareholder in Beijing Utour as part of the deal.
"Ctrip will hold 5 percent of Beijing Utour's shares within the next 12 months through this acquisition," Beijing Utour said in a statement.
According to the agreement, the two sides also will expand their strategic cooperation.
Trading in Beijing Utour shares was suspended last November pending the acquisition and it was not clear on Tuesday when trading will resume.
Established in 1993, Huayuan is one of the country's first outbound travel agencies. It mainly focuses on wholesale business, especially in Europe and on events and conferences.
Ctrip invested in Huayuan in 2014 and has business links with more than 3,000 travel agencies across China.
Beijing Utour will become stronger in the outbound travel industry with the acquisition, said Li Da, a consultant from Guangfa Securities Co.
The cooperation is seen as a winwin for the both sides.
"It will be good for the companies that are developing tourism industry chain," Ctrip said.
Chinese outbound travelers made 120 million trips in 2015, according to statistics from the China Tourism Academy, a think tank under the National Tourism Administration.
Liang Jianzhang, CEO and chairman of Ctrip, said during a 2015 thirdquarter conference call that outbound tourism accounted for more than 50 percent among Ctrip's tourism business.
The cooperation with Beijing Utour is just one step in Ctrip's internationalization process, said a senior executive from the company, adding that the agency will continue investing in popular outbound destinations.
