Mumbai: Internet-based travel agency Yatra.com, co-founded by Anil Ambani’s Reliance Capital Ltd, and the Indian unit of Carlson Wagonlit Travel are in separate talks with Kuoni Travel Group India to try and acquire its business travel arm, Hogg Robinson Sita or HRG Sita.
A deal for HRG Sita, which could end up being valued at around Rs1,000 crore, would give a buyer access to India’s biggest basket of corporate travel clients and significant clout in the organized travel industry.
UK-based corporate travel management firm and co-promoter of HRG Sita, Hogg Robinson Plc., and an Australian travel services company are also in the fray to buy the entire share capital of HRG Sita.
“Last Friday, all four firms submitted price bids (to) Kuoni Travels and bid evaluation is currently progressing. The interesting thing is that the strategic partner itself is keen on buying out,” said a person familiar with the development who didn’t want to be identified. This person added that Carlson Wagonlit, the world’s biggest business travel management company, and Yatra.com were leading the race to buy HRG Sita.
“The negotiations were mainly delayed owing to the differences in valuation. Yatra.com is keen to get access to a huge base of corporate clients, which will complement its existing online business,” he said.
On the block: The HRG Sita office in New Delhi. Kuoni is evaluating the bids that four companies have placed for its business travel division. (Harikrishna Katragadda / Mint)
Rajeev Wagle, chief financial officer of the Kuoni Group, confirmed the company is in talks with several companies to sell the business travel arm, but said he would neither confirm nor deny any specifics. He declined to elaborate.
Senior executives of Yatra.com and Carlson Wagonlit declined to comment.
Kuoni Travel Group, India’s leading travel and tourism company and a 100% subsidiary of Kuoni Travel Holding, Switzerland, had decided to sell HRG Sita about six months ago in a hiving off of what was essentially a non-core operation. It appointed Ernst and Young to handle the transaction.
HRG Sita handles the travel requirements of about 500 multinational and Indian corporations, according to the company’s website, which notes that the firm has some 550 employees. The firm’s revenues through booking are at least Rs720 crore annually.
“The acquisition of HRG Sita will give Yatra.com direct access to several corporate clients. For Carlson Wagonlit, this acquisition will help to strengthen its Indian business,” said a Mumbai-based travel expert who did not want to be identified. He added that this acquisition will enable the buyer more negotiation power with airlines. “This will help the buyers to offer better deals to their existing online and offline customers.”
HRG Sita, formed through a strategic alliance with Hogg Robinson, mainly facilitates the travel arrangements for big corporate houses including hotels. It has a network of 12 fully owned business travel centres across the country.
In January 2007, Kuoni India rebranded its corporate travel division as Hogg Robinson Sita after Hogg Robinson bought out Kuoni’s earlier business travel partner BTI of the UK.
Carlson Wagonlit, co-owned by Carlson Cos. Inc. and Paris-based Accor group, is in the process of increasing its business in India by offering special travel products to small and medium industries. Carlson Wagonlit’s sales volume totalled $25.5 billion in 2007 globally, up 30% year over year.
Investors in Yatra.com include Norwest Venture Partners—Promod Haque’s venture capital firm—and the Television 18 Group, founded by Raghav Bahl, besides Anil Ambani’s Reliance Capital.