On September 16, 2015, the Department of Justice’s Antitrust Division (“DOJ” or “Antitrust Division”) issued a statement regarding it decision to close its six month investigation of Expedia’s $1.3 billion acquisition of Orbitz. The decision means that Expedia can close its acquisition of Orbitz to combine two of only three online travel agencies (“OTAs”) in the United States.
The transaction was announced on February 12, 2015 and the Antitrust Division issued a second request on March 25, 2015. The transaction drew antitrust scrutiny because it came on the heels of Expedia’s acquisition of Travelocity in a deal that was cleared via early termination of the Hart-Scott-Rodino (“HSR”) waiting period on January 14, 2015. That transaction reduced the number of sizable OTAs in the United States from the four-to-three, and consolidated 56% of the market in the hands of the enlarged Expedia. The DOJ scrutinized the Expedia/Orbitz deal because the transaction presented a three-to-two situation, in which the combined Expedia/Orbitz would possess a commanding 75% of the OTA space in the United States, leaving just Priceline as a sizable alternative with roughly 19% share of the space.