PARSIPPANY, NJ— Cendant Corp. will reportedly buy Galileo International for $3.5 billion— $2.9 billion in cash and stock paid for Galileo and the assumption of $600 million of the reservations company’s debt. The transaction will add an electronic reservations network to Cendant’s hotel chains and car rental operations, which handles 92 billion transactions per year. Cendant also owns WizCom, a firm that helps companies contact travel reservation services. Both companies’ boards reportedly approved the sale on Sunday, with Cendant’s paying $33 a share. Midday Monday, Galileo shares were up $1.33 or 4.5% at $31.13 while Cendant shares rose $0.52, or 2.8%, to $18.97. Galileo shareholders will receive $26.57 worth of Cendant stock for each Galileo share with the remainder of the purchase price of $6.44 per share, or about $562 million, to be paid in cash. Rosemont, IL-based Galileo, with approximately 3,300 employees, reported sales of $1.64 billion in 2000. The merger will boost 2002 earnings per share for Cendant by $0.10 to $0.14 per share, said the company. In 2002 the companies expect to save $70-$80 million and as much as $100 million in 2003.
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