US Department of Justice approves Expedia's acquisition of Orbitz for $1.3B after six month investigation; EXPE up 5.6% in after-hours trading
Diane Bartz / Reuters :
Context & Ripple Effects
Orbitz put itself up for sale in January 2015, drawing interest from private equity and internet companies, but Expedia moved first — weeks after closing its $280M Travelocity purchase, it agreed to buy all of Orbitz's brands for $12 per share. The $1.6B February announcement then sat through an extended review: Expedia pushed the termination date from August 12 to November 12 while the DOJ investigated.
Today's clearance ends that wait at a lower headline price of $1.3B, and markets read it as green light rather than burden — EXPE jumped 5.6% after hours. With regulatory risk off the table, the deal slots into a rapid 2015 consolidation run by Expedia.
First-order effects
- Expedia can now close the Orbitz acquisition, folding Orbitz's brands into a portfolio that already absorbed Travelocity this year; Orbitz's board delivers the exit it has sought since January.
- Investors priced the approval as pure upside, sending EXPE shares up 5.6% in after-hours trading once the six-month investigation ended without a challenge.
Second-order effects
- Hotels and suppliers negotiating with online travel agencies now face one fewer independent bidder across Expedia's expanded brand set, strengthening Expedia's hand in rate and placement talks.
- A cleared Orbitz deal keeps Expedia's M&A momentum rolling straight into its next move — the $3.9B HomeAway acquisition announced weeks later, aimed squarely at challenging Airbnb in vacation rentals.
Third-order effects
- The DOJ letting a top-two OTA absorb a direct rival signals regulators saw enough remaining competition to tolerate horizontal consolidation — a template that, if it holds, points toward US online travel concentrating around a small number of platform groups.
- For mid-sized travel brands, the pattern suggests independence is a shrinking option: sale to a consolidator becomes the default endgame once peers have been absorbed.
The trend: US online travel is consolidating rapidly through regulator-tolerated acquisitions, with Expedia using serial deals — Travelocity, Orbitz, HomeAway — to assemble a multi-brand platform group.