Booking offers concessions to EU in bid to clinch €1.6bn Etraveli deal

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Booking Holdings has offered to make concessions to the EU in order to win the approval of its €1.6bn purchase of Sweden’s Etraveli Group, as one of the world’s biggest online travel sites seeks to overcome competition concerns surrounding the deal.

Booking in November 2021 announced 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 strengthen its market position and will hurt rivals, said two people familiar with their thinking.

The Amsterdam-based company is proposing to give travellers who book a flight with Etraveli accommodation options beyond those offered by Booking, said people familiar with the move. This would address a key concern that Booking will only offer its own hotel and apartments services alongside booking a flight.

The proposed concessions come in response to concerns from the European Commission, the executive body of the EU, that the Etraveli deal would allow the travel group a further advantage in the hotels sector, while helping it move into other services like car rentals and flights. 

Under the direction of competition chief Margrethe Vestager, EU regulators have scrutinised deals that could further entrench the market power of big tech firms, paying particular attention to Silicon Valley groups.

However, Vestager’s imminent departure from that post to run for the presidency of the European Investment Bank is weighing heavily over Brussels regulators’ decision over the Booking-Etraveli deal, according to people close to the deliberations, as she may not make the final call on the transaction.

A Booking spokesperson said the company remained in “continued discussions” with the commission. The commission declined to comment.

Booking has attempted to allay competition concerns in other ways. The company told regulators it has already has a commercial agreement that allows Booking users to book flights offered by Etraveli.

Following a closed hearing this month in Brussels, Booking also showed the commission research that showed that few people book accommodation immediately after buying their flight.

But continued concerns that the transaction will make it harder for rivals to gain new customers has led Booking to make its concessions in an effort to secure the transaction.

People close to the talks said the EU, which is scheduled to announce a final decision at the end of August, could still move to block the acquisition, particularly if rival groups said the Booking’s remedies do not go far enough.