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Spain’s Amadeus to by Accenture’s Navitaire for $830 million

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Madrid, Spain-based Amadeus’s main business is under pressure after Deutsche Lufthansa AG, Europe’s largest carrier by revenue, last month said it will impose a 16-euro charge on external reservations.

Amadeus, a Spanish travel technology company, said it would buy Navitaire, a unit of Accenture Plc (NYSE:ACN), for $830 million, to focus mainly on digital services for airline passengers.

Amadeus, which specialises in providing technology for the travel industry, said it expects the deal to have a minimal impact on its financial performance this year. It said the deal would be earnings accretive from the first day.

Minneapolis-based Navitaire works with more than 50 airlines - focusing on low-cost carriers - on IT support for areas such as reservations and loyalty programmes.

As part of the deal, 550 Navitaire employees, including senior management, are expected to move to Amadeus.

Madrid, Spain-based Amadeus’s main business is under pressure after Deutsche Lufthansa AG, Europe’s largest carrier by revenue, last month said it will impose a 16-euro charge on external reservations. The levy means that travel bookers like Amadeus, Sabre Corp. and Travelport Worldwide Ltd. would either pass on the charge or absorb the cost, reducing profit.

"Airlines of all shapes and sizes face an increasingly competitive market for an increasingly demanding traveller, and this transaction will give us the ability to serve all airlines with technology that can enable them to drive new revenues and contain their costs," said Amadeus boss Luis Maroto.

The deal is projected to close in the fourth quarter.

Shares of Accenture fell 1.2 percent at $96.92 at 2:54 p.m. in New York, paring gains this year to 8.6 percent.

Separately, Amadeus and Accenture agreed to form an alliance to help airlines to use technology to increase efficiency. The companies are joining forces in order to provide "door to door" traveller experiences and emphasize the place of analytics, cloud and mobility in the marketplace. Accenture will also be named an Amadeus "Strategic Partner" as part of the deal.

 

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