Expedia set to buy Orbitz for $1.6 billion

Expedia Inc. is looking to expand its customer base by acquiring rival online travel company Orbitz Worldwide in a deal valued at approximately $1.6 billion, the company said Thursday.

Expedia will purchase Orbitz Worldwide - which owns Orbitz.com and Cheaptickets.com - for about $1.33 billion, the company said in a statement. According to the payment agreements, Expedia will pay $12 a share in cash, representing a premium of almost 25 percent over Orbitz's closing price Wednesday.

"We are attracted to the Orbitz Worldwide business because of its strong brands and impressive team," said Dara Khosrowshahi, Expedia's President and CEO. "This acquisition will allow us to deliver best-in-class experiences to an even wider set of travelers all over the world."

"From the flagship Orbitz.com brand, to other well-known consumer brands such as CheapTickets, ebookers and HotelClub and the business-to-business brands Orbitz Partner Network and Orbitz for Business, the Orbitz Worldwide team has built a devoted customer base and we look forward to welcoming them."

Expedia already bought Travelocity in a $280 million deal announced last month. The two companies had had a partnership since 2013 in which Expedia powered Travelocity's U.S. and Canadian operations.

Orbitz had said in January that it was considering selling itself.

Barney Harford, CEO of Orbitz and a former Expedia executive, said: "Our mission at Orbitz Worldwide has been to build our brands to be the world's most rewarding places to plan and purchase travel. We're excited for Orbitz Worldwide to join the Expedia family and for our teams to work together to further enhance the offerings we provide to our customers and partners."