Expedia Inc. announced on Wednesday its decision to acquire HomeAway, Inc. a vacation rental site, for $3.9 billion. The acquisition would bring HomeAway in direct competition with Airbnb, Inc.
The Bellevue, Washington, based Expedia is the parent company of other travel websites, including HotWire.com and Hotels.com, and is presently valued at $18 billion. Expedia has also acquired Travelocity last January and Orbitz Worldwide last February for a $280 million and $1.3 billion, respectively.
Expedia will buy each outstanding HomeAway share of common stock for $10.15 in cash and 0.2065 of a share of Expedia common stock. The transaction will likely close in the first quarter of 2016. The vacation rental site will receive $10.15 cash and 0.2065 of shared Expedia common stock in exchange for each outstanding HomeAway share of common stock, subject to regulatory approvals. The deal is set to close on the first part of 2016.
In a statement published in HomeAway's investors' page, Expedia CEO Dara Khosrowshahi writes: "We have long had our eyes on the fast growing $100 billion alternative accommodations space and have been building on our partnership with HomeAway." The CEO further wrote that making the decision to acquire HomeAway and make it part of Expedia was considered to be a logical step for the company.
Expedia targets travelers who wish to stay for longer periods of time. Airbnb, on the other hand, offers rental spaces for those who are looking for short-term deals. However, with the acquisition of HomeAway, it would now be possible for Expedia to also reach out to short-term onlookers.
HomeAway Inc. is reported to have over a million paid listings of vacation rental homes across 190 countries worldwide. Furthermore, the newly acquired HomeAway also owns rental sites, including BedandBreakfast.com , VacationRental.com for the USA, and more rental sites in other countries such as Germany, Spain, Australia, New Zealand, France, Brazil, and the UK.
