European Union regulators are poised to block the €1.63 billion acquisition of Sweden's Etraveli Group by US online travel site Booking Holdings Inc BKNG due to concerns over competition.
This decision diverges from the stance taken by the UK's Competition and Markets Authority, which approved the deal a year ago.
In November 2021, Booking announced its intention to acquire Etraveli, known for brands like Gotogate and Mytrip and owned by private equity giant CVC.
EU regulators are worried that this acquisition would further solidify Booking's dominance in the travel industry, potentially disadvantaging competitors.
The European Commission expressed concerns about the deal granting Booking an advantage in the hotel booking sector, potentially facilitating its entry into other areas like car rentals and flights.
To address these concerns, Booking offered concessions during a closed hearing, including greater visibility for rivals on its platform as alternative options for hotel bookings.
However, market participants rejected these concessions as insufficient to ensure fair competition.
Antitrust investigators have voiced worries that the acquisition would strengthen Booking's dominant position in the online travel agent market, affecting hotel negotiations and diverting demand from more cost-effective channels.
Additionally, they fear the deal would create higher barriers for competitors to attract new customers, resulting in increased online traffic and higher hotel costs, ultimately impacting consumers negatively.
A formal decision is expected later this month, Financial Times noted, citing sources familiar with the EU's thinking.
Price Action: BKNG shares are down 0.20% at $3,098.73 on the last check Friday.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.
