Priceline.com has agreed to buy Kayak Software for $1.8bn to strengthen its travel research and advertising capabilities.
The company will pay $40 per share, which is a 29% premium over Kayak’s Thursday closing share price of $31.04.
Pipeline Group will pay about $500m in cash and $1.3bn in equity and assumed stock options.
Kayak is a travel research site that allows users to compare travel sites for searching flights, hotels, and rental cars giving travellers choices for their booking.
Priceline Group also operates online hotel reservations under four primary brands – Booking.com, priceline.com, Agoda.com and Rentalcars.com.
The group claims that it provides online travel services in over 180 countries in Europe, North America, South America, the Asia-Pacific region, the Middle East and Africa with 270,000 participating hotels.
Priceline Group president and chief executive officer Jeffery Boyd said, "We believe we can be helpful with KAYAK’s plans to build a global online travel brand."
Kayak chief executive officer and co-founder Steve Hafner said, "The Priceline Group’s global reach and expertise will accelerate our growth and help us further develop as a company."