On Friday, Expedia (NASDAQ:EXPE) announced that it will purchase a 61.6% equity position in Trivago, a European travel site based in Dusseldorf, Germany. The total cost of the deal is roughly $632 million, based on current exchange rates. The purchase will be funded about 90% through cash, and the rest in Expedia common stock.
In a joint statement, Expedia said it expected the deal to be accretive to earnings in 2013, noting that Trivago's attributes "closely align with our Expedia, strategy and values and we are thrilled to have them join our portfolio." Trivago's co-founder and CEO, Rolf Schromgens, added, "We are very excited to join the Expedia portfolio and eager to learn from their experience, having built-up some of the world's most trusted travel brands."
The deal should close in the first half of 2013. At the time of this writing, Expedia's stock was down 2.5% on an overall down day for the market.
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