Tongcheng set for online acquisition

Tongcheng Travel (0780) has moved to acquire a Beijing-based online travel agency for 700 million yuan (HK$799.8 million) at most.

The agency proposes to purchase the whole stake of Beijing Tongcheng Tourism Investment Group from shareholders Tongcheng Air Travel and Suzhou Tiancheng, according to a letter of intent signed by both parties.

Beijing Tongcheng will become Tongcheng Travel's indirect, wholly-owned subsidiary controlled via eLong Net Information Technology.

The travel agency, which has nearly 1,000 shops nationwide, was established by the entertainment arm of Chinese conglomerate Dalian Wanda Group in 2013 and was later spun out by the group and merged with a Tongcheng in 2016.

"Through the possible acquisition, the ecosystem of tourism-related businesses currently offered by the group can be further supplemented in terms of vacation products and content offering," Tongcheng Travel executive director and chief executive Ma Heping remarked as the acquisition announcement was made.

The announcement of the possible acquisition is the second step of the group to further strengthen its market position of comprehensive travel products and service offerings. That followed the acquisition of Tongcheng International Travel Service last December for 200 million yuan.