A Wonderful Trip to Cash Out

Amadeus sold the booking service Opodo to Permira and Axa for 450 million euros last week. Opodo was not an strategic option for Amadeus, which is participated by Air France, Iberia and Lufthansa. Following the acquisition, Axa and Permira plan to merge Opodo with their two rival online travel firms, the French Go Voyages and Spain's eDreams. That will represent a huge consolidation for the European online retail travel sector. Opodo competes with U.S. rivals Expedia Inc (EXPE.O), Priceline.Com Inc (PCLN.O) and Orbitz Worldwide Inc (OWW.N).

Why has Amadeus sold Opodo? Amadeus is now a public company and has to focus on its real business: GDS. That could be a good reason. The price payed for Opodo by Permira and Axa looks great, and that could be another good reason: take the opportunity to cash out your non strategic investment. The fact that Amadeus has stakeholders like Air France, Iberia and Lufthansa may push them to make extraordinary profits to produce higher overall dividends. Or maybe it was the time to do another coporate transaction to generate bonus payouts. Or maybe it was just another great idea from M&A gurus.

Nevertheless, the internet travel sector is like the promised land for corporate transactions: always consolidating, always splitting, always making vertical integrations, and always trying to make horizontal synergies. That is what happens in a sector that changes along with the changes in technology. From the final customer to the travel product conception, all the value chain and its actors are being affected by the scalability of the internet. I believe that there is a long way to go in that direction because many of the travel sector actors have yet to be affected by the internet. There are still some niches that will dramatically change how they work. But the framework is narrowed and the trip to cash out will end sooner or later.

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