Travelport has announced that it has reached an agreement to acquire and merge with Worldspan for $1.4 billion. The deal awaits approval by antitrust regulators in the U.S. and Europe. Both companies hope to seal the deal by the second or third quarter of 2007. More than 750 travel suppliers, 63,000 travel agency locations and millions of consumers globally use travel distribution services provided by Travelport and Worldspan. A combination of Worldspan and Travelport's Galileo and Apollo would represent just over 50 percent of the GDS market share in the U.S. and 40 percent globally. In announcing the deal, Travelport and Worldspan noted competition in travel distribution had increased, driven in part by travel bookings via alternative channels. The companies also predict continued growth in sales from supplier-direct web sites, especially as airlines continue to encourage direct bookings through frequent-flyer programs, exclusive fares and potentially through removal of content from the GDSs. Through the merger, Travelport and Worldspan hope to regain diminished marketplace clout.
