Priceline.com Inc. is acquiring Kayak Software Corp. in a $1.8 billion deal that unites travel companies from two different stages of the dot-com industry.

Priceline, the older and larger of the two, will pay $500 million in cash and $1.3 billion in equity and assumed stock options. The agreed-upon transaction values Kayak at $40 per share, a premium of about $29.

Kayak is expected to continue operations as a separate business entity within the Priceline Group.

Each company issued a statement.

Priceline Group president and CEO Jeffery H. Boyd: “Kayak has built a strong brand in online travel research and their track record of profitable growth is demonstrative of their popularity with consumers and value to advertisers. Kayak also has world class technology and a tradition of innovation in building great user interfaces across multiple platforms and devices. We believe we can be helpful with Kayak’s plans to build a global online travel brand.”

Steve Hafner, Kayak CEO and co-founder: “Paul English and I started Kayak eight years ago to create the best place to plan and book travel. We’re excited to join the world’s premier online travel company. The Priceline Group’s global reach and expertise will accelerate our growth and help us further develop as a company.”

Related links:

Priceline – press release

Kayak – press release

Bloomberg – Priceline Buys Kayak for $1.8 Billion Expanding in Travel

New York Times – Priceline.com to Buy Kayak for $1.8 Billion

Los Angeles Times – Priceline.com to grow travel empire with $1.8-billion Kayak offer