Ctrip.com Internatnional LTD. (Nasdaq:CTRP)

China-based online travel firm Ctrip.com announced on Thursday that it had agreed to purchase fellow travel website Skyscanner. The deal, worth roughly $1.74 billion in cash and equity, will see the Chinese travel giant expand its global reach.

Skyscanner, based in Scotland, has seen growth slow in recent months, partly due to a shift towards investment in products. The company recently raised funding that valued it at $1.6 billion, and was expected to IPO as soon as 2017.

Under the terms of the acquisition, Skyscanner will continue operating independently of Ctrip.However, they are likely to provide the company with an expanded hub for its customers to find international flights.

The deal continues a recent spree by Ctrip, which has been aggressively expanding through acquisition. In slightly over a year, the company has agreed to a share swap with rival Qunar that saw it gain a 45.00% voting interest.Besides Qunar, Ctrip purchased 25.00% of Indian travel site MakeMyTrip. Moreover, CTRP spent $463 million to purchase a share of China Eastern Airlines, which counts 94 million passengers.

Technically Speaking

CTRP jumped significantly in afterhours trading, however, the deal will likely to cause shares to retreat on the acquisition costs.Typically, an acquirers stock falls after a takeover announcement.Nevertheless, the jump to $43.85 per share coincides with the 200-day moving average.Due to the fact that the moving average is trending lower above the price action, it is acting as resistance.This may prevent a further rally in shares, especially with the 50-day moving average trending lower above the price-action.

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On a longer-term basis, the shares have been trading sideways in a horizontal range between $38.38 and $49.40.This could present a unique range-trading opportunity, especially if CTRP falls below support at $40.00.Should it coincide with an oversold Stochastic Oscillator and Relative Strength Index it could suggest an excellent bullish entry point.

Looking Ahead

It appears that CTRP is looking to boost its global presence after becoming a mainstay in China’s travel industry. The company’s pattern of acquiring shares in global companies points to a dedicated effort to reach new markets. With the Skyscanner purchase, Ctrip is gaining a company that offers its services to 60 million active users in over 30 languages.

Although the initial acquisition is likely to weigh on shares, expansion through acquisition is a proven model. Should CTRP be able to expand its reach by leveraging Skyscanner’s resources, any near-term losses in shares could quickly reverse.