USA Interactive is purchasing the remaining stock of online travel marketer Expedia Inc. it doesn't already own in a stock deal valued at $3.3 billion, the companies said yesterday.
The merger expands USA Interactive's portfolio of travel companies in which it owns or has a majority stake, including Hotels.com, Interval International, TV Travel Group and an upcoming U.S. cable travel network. According to a comScore Media Metrix report, Expedia reached about 17 million Internet users in February, about 50 percent more than its closest competitor, Orbitz.com.
Under the merger, Expedia shareholders receive 1.93875 shares of USA Interactive stock for every share of Expedia stock they own. Despite the cost of the deal, USA Interactive still expects to meet its 2003 earnings goal of 75 cents per share, the company said.
USA Interactive chairman/CEO Barry Diller acknowledged in a statement that the merger comes just as the travel business is facing the effects of a probable war between the United States and Iraq. The timing of the deal was “an accident,” but USA Interactive's decision to proceed signals its confidence in the long-term growth of online travel, Diller said.
Other USA Interactive holdings include the Home Shopping Network, Precision Response Corp., Ticketmaster, Evite.com and Match.com.