Expedia Inc. announced it has entered into an agreement under which it will acquire Orbitz Worldwide, Inc., including all of Orbitz Worldwide's brands, for $12 per share in cash.

This represents an enterprise value of approximately $1.6 billion, and a premium of approximately 29% over the volume weighted average share price for the five trading days up to and including Feb. 11, 2015, says the company.

The boards of directors for both companies have approved the transaction, which is subject to approval by the shareholders of a majority of Orbitz Worldwide's common stock and other customary closing conditions, including applicable regulatory approvals.

"We are attracted to the Orbitz Worldwide business because of its strong brands and impressive team,” said Dara Khosrowshahi, president and chief executive officer at Expedia, Inc. “This acquisition will allow us to deliver best-in-class experiences to an even wider set of travelers all over the world. From the flagship Orbitz.com brand, to other well-known consumer brands such as CheapTickets, ebookers and HotelClub and the business-to-business brands Orbitz Partner Network and Orbitz for Business, the Orbitz Worldwide team has built a devoted customer base and we look forward to welcoming them to the Expedia Inc. family."

Orbitz Worldwide’s board of directors received a fairness opinion from Qatalyst Partners and it has recommended that its stockholders vote in favor of the merger.

"Our mission at Orbitz Worldwide has been to build our brands to be the world's most rewarding places to plan and purchase travel," said Barney Harford, chief executive officer of Orbitz Worldwide. "We're excited for Orbitz Worldwide to join the Expedia Inc. family and for our teams to work together to further enhance the offerings we provide to our customers and partners."