The termination of the merger agreement between US-based software company, Ebix Inc and Online travel company Yatra Online Inc which could have created India's largest travel services company, has sent shock waves in the travel industry.
In 2019, Ebix Inc had entered into an agreement to acquire Yatra Online Inc, the parent company of online travel firm Yatra.com, for an enterprise value of USD 338 million (approx Rs 2,300 crore).
Ebix Inc issued a statement on the termination of the Merger Agreement with Yatra and clarified its stand.
The statement reads:
Ebix, Inc. a leading international supplier of On-Demand software and E-commerce services to the insurance, financial, e-governance and healthcare industries, issued a statement in response to the termination of the merger agreement with Yatra.
On May 14, 2020, Yatra Online, Inc. entered into an agreement with Ebix, Inc. (“Ebix”) extending the outside date of completion of the Merger Agreement to June 4, 2020 (the “Outside Date”). The Merger Agreement contained certain termination rights for Ebix and Yatra, including, among others, the right of either party to terminate the Merger Agreement if the Merger has not been consummated on or prior to the Outside Date. The Outside Date was extended to June 4, 2020, in order to provide the parties with time to determine whether they can reach mutual agreement on an amendment of certain terms of the Merger Agreement.
After the expiration of the Outside Date and the failure of the two parties to agree on the terms of an amended Merger Agreement by the Outside Date of June 4th, Yatra terminated the Merger Agreement on June 5, 2020, and filed suit against Ebix in the Delaware Court of Chancery for breach of contract.
Ebix worked diligently to fulfil its obligations under the Merger Agreement and thus strongly disagrees with the allegations set forth in the complaint. Ebix intends to enforce all of its rights under the Merger Agreement and is currently considering all options, including a countersuit against Yatra on account of multiple breaches of its representations, warranties, and covenants under the Merger Agreement.