Travel booking company Priceline announced today that it will buy the restaurant reservation website OpenTable for $2.6 billion in cash. The purchase is the latest in a series acquisitions that will help Priceline offer an end-to-end travel experience and better compete with rival Expedia.
Globally, Expedia and Priceline operate similarly sized businesses. Both generated about $39 billion in gross bookings in 2013 through a mixture of airline ticket, hotel and car rental offerings. But Priceline’s business is heavily international, with about 85 percent of its bookings occurring outside the U.S last year. OpenTable, which seated about 144 million diners in the U.S. alone last year, will expand Priceline’s exposure at home. The new acquisition will also allow for new cross-promotional opportuniites.
"They provide us with a natural extension into restaurant marketing services and a wonderful and highly-valued booking experience for our global customers," Darren Huston, CEO of The Priceline Group, said in a press release. "We look forward to helping the OpenTable team accelerate their global expansion, increase the value offered to their restaurant partners, and enhance the end-to-end experience for our collective customers across desktop and mobile devices.”
Expedia hasn't been sitting still as Priceline has gobbled up booking websites. Last fall Expedia signed a long-term agreement to power the search results for competitor Travelocity, a move that one analyst likened to a "virtual merger."
OpenTable users likely shouldn’t fret about the company’s service changing significantly because of the buyout. Priceline already independently operates subsidiaries such as Kayak, booking.com and rentalcars.com. The company said OpenTable would continue to operate as an independent subsidiarity at its San Francisco headquarters.
Shares of OpenTable soared more than 45 percent to $103 on news of the acquisition. Priceline shares dipped 2 percent to $1,202.