Today, 7 December, Travelport and Worldspan signed a definitive agreement to merge the travel technology company into a subsidiary of travel conglomerate Travelport. The transaction values Worldspan at $1.4bn (”712.7m), and has been unanimously approved by the boards and major shareholders of the companies. However finalisation of the deal awaits regulatory approval.
The move aims to enhance Travelport”s online distribution and travel technology services, as well as cut costs for customers by capitalising on natural operational synergies. Near-term cost savings from consolidating technology and administration are expected to reach $50m (”25.5m). Currently the two companies supply services to over 750 travel suppliers and 63,000 travel agencies.
CEO for the combined company will be Jeff Clarke, who will take over the position of Worldspan”s current CEO Rakesh Gangwal when the merger is finalised. A team of integration planners have also been appointed, including Travelport chief administrative officer Terry Conley; Travelport chief re-engineering officer Pat Bourke; and Worldspan chief financial officer Kevin Mooney.
Jeff Clarke made the following statement on the deal: ”Increasing cost pressures on travel suppliers and agencies combined with the strengthening of alternative distribution channels, such as supplier direct channels, continue to influence how travel is purchased. This merger will create a more effective and efficient travel distribution provider and will ensure that we are better positioned to meet the evolving needs of our customers, the travel suppliers, travel agencies and end consumers.”