Ctrip.com will issue convertible bonds to Priceline for the investment, the two companies said in a statement. This investment follows a commercial relationship which was established between the two companies in 2012. In August of 2014, this relationship was expanded as Priceline invested $500 million in the Chinese online travel company.
"Ctrip continues to be a very important partner for The Priceline Group in China, and we look forward to continuing to build upon that partnership," said Priceline's President & CEO Darren Huston. "We consider Ctrip a market leader in China and we're investing in a company and a team that we believe fits well with our long-term view of China as a market and the Chinese people as global travelers."
CEO and Chairman of Ctrip James Liang responded to the investment, stating, "Today's news aligns with our continued commitment to drive our existing commercial agreement with The Priceline Group forward in order to deliver more value for travelers seeking great accommodations all over the world."
Priceline's stake in Ctrip.com will rise to about 10.5% from 5% as of November 4, the company said.
In Tuesday's early morning trading, shares of Priceline are declining 0.58% to $1,201.50. Shares of Ctrip.com are down 2.79% to $82.27 after rising more than 5% before the stock market opened this morning.
TheStreet Ratings team rates PRICELINE GROUP INC as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation: