ChinaTravelNews - UTour has indicated in its latest statement that Huayuan International Travel will be a target of acquisition for its major asset restructuring. This statement issued on January 25 is a follow-up to UTour’s earlier statement released on November 30, 2015 announcing it was planning a major asset restructuring.

ChinaTravelNews speculates that UTour might take full control of Huayuan and carry out in-depth cooperation with Ctrip on vacation tours. If the two companies cooperate through an asset swap, the best way to do this would be Ctrip taking equity in UTour and UTour taking shares in the vacation tours business of Ctrip, which is being hived off as independent operations and earmarked for a listing.

Huayuan International Travel, established in 1993, has more than 500 employees. It‘s headquartered in Beijing and it has branches in cities such as Shanghai, Guangzhou and Hong Kong. Its wholesale brand ETI HOLIDAYS includes business such as sightseeing tours, vacation tours, MICE, self-guided tours and luxury travels. Huayuan received funding of $10 million from JAFCO Asia and Investor Growth Capital on March 28, 2008. It later received another round of funding from Ctrip and CITIC Private Equity Funds Management Co., Ltd (CITIC PE) in September 2014, and Ctrip became its largest shareholder. 

On November 16 last year, Ctrip restructured its vacation tours business by combining its group tours, air ticket+room reservation and cruise business into one new business unit for vacations. There are speculations that this new business unit might get spun off and be listed on its own. One of the possible directions for future development is that Ctrip might merge the wholesale-focused Huayuan with UTour, while Ctrip itself will focus on retailing vacation business. Ctrip might work closely with UTour to beef up UTour’s muscle in the outbound tourism wholesale market. If the deal materializes, it might be the largest merger ever in the vacation tourism sector of China. (Translation by Jerry)