Amadeus IT Holding SA agreed to buy Accenture Plc"™s Navitaire for $830 million as the flight-bookings provider seeks to add products that target low-cost airlines in its largest acquisition.
Amadeu"™ own offerings largely target full-service carriers and the company said it intends to market and sell the two product portfolios separately, investing in both. The deal is expected to be completed by the end of 2015 and as many as 550 Navitaire employees will be transfered to Amadeus.
Amadeu"™s main business is under pressure after Deutsche Lufthansa AG, Europe"™s largest carrier by revenue, last month said it will impose a 16-euro ($18) charge on external reservations. The levy means that travel bookers like Amadeus, Sabre Corp. and Travelport Worldwide Ltd. would either pass on the charge or absorb the cost, reducing profit.
Amadeus shares rose as much as 4.6 percent in Madrid, the steepest intraday gain since Oct. 28., and advanced 0.2 percent to 36.33 euros as of 1:14 p.m. That values the Madrid-based company at 16.3 billion euros, more than three times Lufthansa"™s market value. The German carrier was among the founders of Amadeus in 1987.
Complementary Geography
The acquisition will reinforce Amadeu"™ IT division in the low-cost carrier and hybrid segments and will "support long-term growth in a moment of uncertainty for its distribution business," Kepler Cheuvreux analyst Natalia Bobo wrote in a note on Thursday. "Both companies are complementary from a geographical and customer standpoint."
Lufthansa said it was frustrated about the profits made by providers of distribution services when compared with airlines, and fears about other carriers following suit contributed to a 12 percent drop in Amadeu"™s shares on June 3…
