EU Prohibits Booking's Acquisition Of Etraveli; Booking To Appeal Decision

(RTTNews) - The European Commission has prohibited Booking Holdings Inc.'s (BKNG) proposed acquisition of Flugo Group Holdings AB, called as eTraveli, from CVC Capital Partners, citing not so sufficient remedies to reduce its dominant position.

In response, Booking said it intends to appeal the Commission's decision to prohibit the deal to the European courts. The company further announced an extension of an existing and long-standing commercial partnership agreement between Booking.com and Etraveli Group through at least December 2028.

Both Booking and eTraveli are major providers of online travel agencies or OTA services. Booking provides hotel OTA while eTraveli provides flight OTA services in Europe.

Earlier in the day, the Commission stated that the proposed acquisition would have combined Booking and eTraveli, allowing Booking to strengthen its dominant position on the market for hotel OTAs in the European Economic Area. This would lead to higher costs for hotels and, possibly, for consumers.

However, Booking did not offer remedies that were sufficient to address the Commissions's various concerns.

The Commission said it reached the decision under the EU Merger Regulation following an in-depth investigation, during which it received feedback from a large number of stakeholders, including hotels and competing OTAs.

"Market participants were concerned that the transaction would strengthen Booking's dominant position on the market for hotel OTAs in the EEA, reduce competition and increase prices for hotels and, possibly, for consumers, the Commission noted.

Meanwhile, Booking said it strongly believes the Commission is wrong on both the facts of the case and the law applicable to the deal, which was cleared by multiple competition authorities, including the UK Competition & Markets Authority and U.S. FTC, unconditionally.

The company said that the Commission has fundamentally misconstrued the highly competitive travel markets for flights and accommodations.

According to the firm, the acquisition would have combined two separate but complementary Europe-based businesses operating within separate, highly competitive industries. It would have delivered tremendous benefits for consumers and partners by bringing more options and competitive pricing.