MakeMyTrip will buy 100 percent of Ibibo Group in an all-stock deal. Pictured: [Representational Image]MakeMyTrip

India's travel website operator MakeMyTrip Ltd on Monday announced it will buy its rival, Ibibo Group. Once the deal is completed, this will create India's biggest company in the online travel booking market.

Although the value of the all-stock deal was not announced, sources aware of the deal told Mint that the deal value is estimated to be pegged at $720 million.

The combination is expected to bring together consumer travel brands, which includes MakeMyTrip, Goibibo, RedBus, Ryde and Rightstay. Together Ibibo and MakeMyTrip processed 34.1 million transactions in the financial year 2015-16, MakeMyTrip said in a statement.

The transaction is expected to close by the end of December 2016.

Also read: MakeMyTrip under scanner for service tax evasion of Rs 75 crore

Deep Kalra, founder of MakeMyTrip (MMT) will remain the group chief executive and chairman of MakeMyTrip Group. Rajesh Magow, co-founder of the travel portal will retain his role of chief executive of MakeMyTrip's India business. Ashish Kashyap, founder of Ibibo Group will join MMT's executive team as a Co-founder and President of the organisation.

Ibibo owners, Naspers and Tencent hold 91 percent stake and nine percent stake in the company respectively. Once the deal is closed, MakeMyTrip will own 100 percent of Ibibo Group. Naspers and Tencent will become the single largest shareholder in MMT.

"We expect this deal to create an even more scalable business with the expertise to transform the booking experience for Indian travellers," Deep Kalra, Chairman and Group CEO of MakeMyTrip said in the statement.

According to a report in Reuters, MakeMyTrip had a market capitalization of about $861.3 million as of Monday's close.

The online travel agency competes with Cox & Kings, Expedia, Thomas Cook (India) and new entrant OYO rooms in its hotels booking business.

"India is a key market for Naspers, and this deal reinforces our commitment to the country," Bob van Dijk, CEO Naspers said.

Morgan Stanley is acting as exclusive financial advisor to MMT. Goldman Sachs is acting as exclusive financial advisor to Ibibo and Naspers.