Naspers exits MakeMyTrip, Ctrip raises stake to 49% in share-swap deal

Naspers will own about 5.6% of Ctrip's shares, while Ctrip will raise its shareholding to 49% in MMT

Ctrip.com, China's largest online travel company, has increased its stake in MakeMyTrip (MMT) to 49 per cent through a share swap deal that will see the exit of Naspers from the firm.

Based on the current market capitalisation, Ctrip’s 49 per cent ownership in the Nasdaq-listed MMT will be valued around $1.3 billion. There will be no fresh fund infusion in the company as a part of the deal.

Ctrip picked up a 9 per cent stake in MMT in 2016 with a $180-million investment. Naspers owns 40 per cent in MMT. Naspers will exchange its stake in MMT for newly-issued shares in Ctrip, the companies announced on Friday. 

After the transaction, Naspers will own about 5.6 per cent of Ctrip's total shares, while Ctrip will increase its shareholding to 49 per cent in MMT.  The companies did not disclose the valuation of the deal. They said the transaction would conclude in the second half of 2019 after the receipt of regulatory approvals.

“We have worked with Ctrip in the past and are excited to take this partnership to the next level. We will leverage this investment to benefit from the tremendous growth potential in travel and tourism between our countries,” said Deep Kalra, MMT chairman and group CEO. This is Naspers’ second large exit from Indian e-commerce firms. Last May, it sold its 11.8 per cent stake in Flipkart to Walmart for $2.2 billion. Naspers owned Ibibo, which was acquired by MMT in 2016. As a part of that transaction, Naspers secured a 40 per cent stake in MMT. 

“Today’s announcement provides a major boost for MMT and the rapidly growing travel industry in India. This partnership will benefit all our stakeholders including employees, customers and business partners. We look forward to working with the Ctrip team to continue to take our business to the next level,” said Rajesh Magow, co-founder and CEO-India of MMT.