The Chinese tech mergers roll on: Baidu now biggest shareholder in Ctrip

Baidu, China’s search juggernaut, now owns about 25 percent of Ctrip, the country’s most popular provider of train tickets, flights, hotel reservations, and other travel services. These shares make Baidu the single biggest holder of Ctrip stock, according to Sina.

The deal is more complicated than it sounds. Before this transaction, Baidu owned a significant stake in Qunar, one of Ctrip’s biggest rivals in the Chinese travel-booking space. Baidu has passed that stake over to Ctrip, meaning Ctrip now holds a 45 percent stake in one of its main competitors.

More opportunities for Baidu

“Our business arrangements with Qunar remain in place – all the hotels, the flights you can book so easily through Baidu search, etc. – but we’re now expanding with more partnerships with Ctrip as well,” Kaiser Kuo, international communications director at Baidu, tells Tech in Asia.

“Qunar management will remain intact and the two companies will be operating independently,” Kaiser continues, “Though of course Ctrip is now a very substantial (but still not majority) shareholder in Qunar, and they’ll have some board seats.”

The combined value of the deal is valued at about US$3.4 billion dollars, based on the price and number of shares exchanged.

A rocky past

Qunar and Ctrip don’t exactly have a friendly history. There have been accusations of employees posting false complaints on the other company’s website, rumblings of a price war, and as recently as June of this year, Qunar turned down an acquisition offer from Ctrip.

It looks like the companies have managed to make up since this summer. Either that, or they’ve just come to realize that – after Didi/Kuaidi, Meituan/Dianping, and quite a few more – that mergers between rivals is just how business is being done in today’s Chinese tech industry.