EU set to block Booking’s €1.63bn purchase of Etraveli
Regulators are concerned deal would consolidate US travel site’s market position and hurt rivals
EU regulators are set to block US online travel site Booking Holding’s €1.63bn purchase of Sweden’s Etraveli Group following concerns that it threatens competition, according to four people with direct knowledge of the decision.
The decision contrasts with the stance of the UK’s Competition and Markets Authority, which approved the deal a year ago.
Booking announced in November 2021 its intention to buy Etraveli, which runs brands such as Gotogate and Mytrip and is owned by private equity giant CVC.
EU regulators are concerned that Booking’s acquisition of the flights-only company will further consolidate its position in the travel market and hurt rivals, said people familiar with the discussions in Brussels.
The move comes weeks after the European Commission, the EU’s executive body, said it was concerned the deal would give Booking a market advantage by boosting its place in the hotel booking sector and help it move into other services such as car rentals and flights.
It also follows a closed hearing where the company sought to appease regulators’ concerns by offering concessions that included allowing rivals to have more visibility on its site as alternatives for hotel bookings.
The move by the EU also comes after a test of the remedies with market participants, who rejected the concessions as not being enough to guarantee free and fair competition, these people added.
Antitrust investigators said that following an in-depth probe they were worried the deal would “strengthen Booking’s dominant position in the hotel (online travel agent) market further, increasing its bargaining position towards hotels and diverting demand from cheaper alternative sales channels”.
Regulators said choice was “already limited” in the sector and that Booking seemed to have an “unconstrained” position.
Brussels is also concerned that the acquisition will lead to higher barriers to entry and expansion by making it harder for rivals to gain new customers.
Separately, regulators fear Booking would “significantly” boost its online traffic and raise costs for hotels — ultimately harming consumers.
An official decision is expected later this month but people with direct knowledge of the EU’s thinking said the merger would be vetoed.
The decision is a rare one by the commission which clears most deals and is likely to be the last one blocked under current competition supremo Margrethe Vestager before she takes unpaid leave to campaign for the top job at the European Investment Bank.
A change in commissioner is unlikely to affect the decision, they added.
The commission declined to comment. Booking did not immediately respond to a request for comment, but people with knowledge of Booking’s thinking expect it to appeal against any veto.
The company is also set to renew a four-year commercial deal it has had with Etraveli for another five years.
Other deals facing particular EU scrutiny include Orange’s proposed €19.6bn acquisition of mobile telco MasMovil because regulators are concerned the transaction may reduce the number of operators in the Spanish market and ultimately lead to higher prices and less innovation.