Travelport to Buy Worldspan for $1.4 Billion

Travelport reached an agreement to acquire and merge with Worldspan in a blockbuster $1.4 billion deal that now must pass muster with antitrust regulators in the U.S. and Europe. The companies hope to get that approval and close the deal in the second or third quarter of 2007.

In announcing the deal, Travelport and Worldspan noted competition in travel distribution had increased, driven in part by travel bookings via alternative channels.

Globally, sales from supplier-direct websites are expected to continue to grow as airlines encourage direct bookings through frequent-flyer programs, exclusive fares and potentially through removal of content from the GDS, they added.

By combining Travelport and Worldspan, the companies hope to regain some of the competitive power they have lost. More than 750 travel suppliers, 63,000 travel agency locations and millions of consumers globally use travel distribution services provided by the companies, according to the companies.

Travelport operates 20 brands, including Galileo, Orbitz and Gullivers Travel Associates, which is a wholesaler of travel content. The private company is owned by the Blackstone Group of New York and Technology Crossover Ventures of Palo Alto, Calif.

Worldspan, headquartered in Atlanta, is owned by Court Square Capital Partners and Ontario Teachers’ Pension Plan. Worldspan has been under severe pressure because it has been losing business from major customers as those customers diversify their GDS vendors.

Travelport officials said they do not yet know whether the merged company would continue operating Worldspan and Galileo/Apollo as separate systems, or combine them into one.