- Chinese e-commerce company JD.COM (JD.NASDAQ) is reportedly in talks with Chinese online travel service provider Tuniu Corp. (TOUR.NASDAQ) to acquire a controlling stake in Tuniu, as PeDaily reports.
- Neither JD nor Tuniu have commented on the news.
Why It Matters:
- JD currently holds a 20.6% stake in Tuniu, and is already the second largest shareholder, following HNA Group, which holds 26.5%. In order to become the controlling shareholder, JD would need to acquire an additional 30% stake.
- Tuniu’s stock price has been under pressure since last year. Currently, the total market capitalization of Tuniu stands at a low point of approximately US$ 1.022 billion, and it is therefore a good time for JD to increase its holding in Tuniu.
- As JD runs O2O platforms and O2O has become the mainstream business model for China’s travel industry, the acquisition of Tuniu would help JD expand in the travel services business, such as hotel and air ticket bookings.