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Priceline (PCLN) Gets EU Approval for Momondo Group Takeover

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The European Commission has unconditionally approved The Priceline Group Inc.’s deal to take over Momondo Group from Boston-based private equity firm Great Hill Partners. The deal is worth $550 million which is now expected to be completed soon.

Momondo Group operates momondo, a travel metasearch site that provides hotels flights and car rentals and Cheapflights, a global flight comparison and travel-deals publishing platform.

Post acquisition, Momondo will be absorbed into Priceline’s travel meta brand, Kayak.

In the last one year, the stock has outperformed the Zacks Electronic Commerce industry. It has increased 83% compared with the industry’s gain of 51.5%. The company continues to witness strong growth in its international markets.

More Into the Headlines

The EU antitrust regulators believe that the deal will not raise any competition concerns in the European Economic Area. The merged entity will continue to face competition from other operators such as Trivago (TRVG - Free Report) , TripAdvisor (TRIP - Free Report) or Alphabet’s (GOOGL - Free Report) Google.

The European Commission said, "The proposed transaction would raise no competition concerns on any of the markets examined".

The Deal Expands Priceline Share in Europe

Priceline generates bulk of its business from international markets where growth prospects are more than in the domestic market. According to PhoCusWright, online travel booking in Europe is growing faster than in the U.S.

Since Priceline is strongly positioned here, it will be able to benefit from increasing penetration rates through Momondo. Over the years, Kayak has failed to gain much traction in Europe. However, the addition of Momondo might help it to consolidate its presence in this market.

Zacks Rank

Priceline has a Zacks Rank #4 (Sell). You can see the complete list of today’s Zacks #1 Rank stocks here.

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