Expedia Disposes Stake In Chinese Subsidiary eLong For $671 MillionMay 26, 2015 2015-05-26 8:49
Expedia Disposes Stake In Chinese Subsidiary eLong For $671 Million
Expedia has sold its majority stake in Chinese partner eLong for $671 million after the company failed to turn a profit and registered a $31 million loss in Q1 2015.
The 62.4% stake Expedia owned in eLong was snapped up by numerous Chinese travel firms, including Ctrip which confirmed that it paid about $400 mn for 37.6% stake.
While the US company did not mention why it disposed of its stake in eLong, it seems to be largely due to non-performance of the Chinese subsidiary.
eLong has been struggling to turn a profit and the prospects of that happening anytime soon are remote. Moreover, investors felt it was a good move with Expedia shares jumping 7%.
In order to make up for the lack of a partner in China, Expedia has announced that it will partner with Ctrip, although it isn’t clear how the two companies might work together.