Sabre Corp. signed a definitive agreement to acquire 100% of Abacus International, the Asia Pacific GDS that is a joint venture of Sabre and a consortium of 11 Asian airlines. Sabre’s current stake in the company is 35%
“This is the best and most capital-efficient way to expand in Asia Pacific,” Tom Klein, Sabre’s president and CEO, said in a conference call.
Sabre will pay $411 million for Abacus, a price that Klein called “sensible,” with “largely cash on hand.”
Abacus has more than 100,000 travel agent subscribers in the region’s 59 markets.
Its content includes a large portfolio of low-cost and Chinese airlines. Abacus last year became the first GDS outside China to gain IATA billing and settlement plan certification for China.
“We will be fully controlling our destiny in the Asia Pacific region,” Klein said.
Sabre has supplied Abacus’ technology since 1998 when Abacus ended a relationship with Worldspan.
“Because our technology is deeply embedded in Abacus, we expect the integration to be easy,” Klein said.
The deal also will eliminate the bureaucracy and inefficiencies inherent in any joint venture and will enable faster time to market for various products, he added.
Abacus will operate as a region of Sabre Travel Network.
Klein indicated there would be a few “redundancies” among staff, but he did not elaborate. He also gave no indication as to whether Abacus chief executive Robert Bailey would remain with the company.
No news yet on organizational changes
In a statement, Sabre said it “values the strength, commitment and capabilities of Abacus’ team. At this stage, we are unable to discuss potential organizational changes.”
As part of the deal, Sabre signed new, “very long term” agreements with the 11 airlines that participate in the joint venture: All Nippon Airways, Cathay Pacific Airways, China Airlines, EVA Airways, Garuda Indonesia, DragonAir, Malaysia Airlines, Philippine Airlines, Royal Brunei Airlines, SilkAir, and Singapore Airlines.
Klein said agents in the region can expect the same level of airline content after the acquisition.
Sabre is eyeing an Aug. 1 close of the deal, but Klein said it could close as early as July 1. The deal is subject to regulatory approval in several countries, but since it does not involve a competitor, approvals are almost assured, he added.