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China's top travel agency to join bid for Korea's online retail platform

The race to acquire Interpark is expected to heat up between Trip.com and Korea's top accommodation platform, Yanolja

By Aug 03, 2021 (Gmt+09:00)

China's top travel agency to join bid for Korea's online retail platform

China’s leading online travel agency (OTA) Trip.com will be joining the race to acquire South Korea’s online retail platform Interpark Corp. as the company aims to expand its presence in Korea's travel and culture segments. Trip.com is currently the world's No. 2 online travel platform.

Trip.com’s participation is expected to draw attention from industry watchers since the company will be competing against Korea's top travel and accommodation platform, Yanolja, which is also pushing to acquire Interpark amid its efforts to transform into a comprehensive leisure platform.

According to the investment banking industry on August 3, Interpark's largest shareholder Lee Ki-hyung and sale manager NH Investment & Securities recently signed non-disclosure agreements with potential bidders and distributed the information memorandum (IM). 

Lee, also the founder and chief executive of Interpark, has put up his 28% stake in Interpark for sale. The company's subsidiaries including iMarket Korea will not be included in the sale.

So far, around seven candidates have received the IMs. Yanolja and Trip.com have already kicked off the process of hiring advisors, reflecting their strong determination to take over the first-generation online retail platform.

Meanwhile, other companies previously mentioned as potential buyers such as portal operator Naver Corp., mobile app giant Kakao Corp. and retail giant Lotte Group have not finalized their decisions. The preliminary bidding is set to take place in mid-August.

China's top travel agency to join bid for Korea's online retail platform


FIERCE COMPETITION EXPECTED BETWEEN TRIP.COM AND YANOLJA

The bid to acquire Interpark is expected to heat up with major OTAs from China and Korea competing against each other.

Founded in 1999, Trip.com, formerly Ctrip, quickly became China’s top travel agency upon its launch, accounting for around a 60% market share in China. Following its success, the company went on to make a trading debut on the Nasdaq in 2003.

Trip.com has been pushing for an aggressive expansion over the past five years. 
The company spent around 2 trillion won ($1.7 billion) to acquire the Scottish travel startup Skyscanner in 2016 and entered a strategic partnership with the US-based travel app Tripadvisor in 2019.

The company's share price has dropped a bit due to the global pandemic delivering a heavy blow to the travel industry alongside tightened platform regulations in China. But Trip.com's market capitalization still stands at around 19 trillion won, making the company a strong contender with deep pockets.

By acquiring Interpark, Trip.com would be able to expand its footing in Korea's travel booking and ticketing segments. The Chinese travel agency is likely to make use of Interpark’s some 39 million users and its rich network of hotels and airlines to speed up its foray into the Korean market.

Meanwhile, Yanolja is also set on finishing the race to acquire Interpark. The accommodation platform is in the works to evolve into a comprehensive online travel platform and acquiring Interpark would help the company gain valuable resources in the travel and ticketing space.

Yanolja also comes with abundant financial resources given that it recently raised around $2 billion from the Masayoshi Son-led SoftBank Vision Fund.

However, potential buyers are still likely to be concerned over the high sale price as CEO Lee remains firm on keeping the price between 300 billion won and 400 billion won.

Write to Jun-ho Cha at chacha@hankyung.com

Danbee Lee edited this article.

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