Priceline announced today that it has signed an agreement to acquire Kayak in a deal valued at $1.8 billion ( $40 per share of Kayak). Priceline will pay approximately $500 million in cash and $1.3 billion in equity and assumed stock options.

“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,” said Priceline Group President and CEO Jeffery H. Boyd. “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.”

“Paul English and I started Kayak eight years ago to create the best place to plan and book travel,” said Kayak CEO and co-founder Steve Hafner. 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.”

The Boards of Directors of both companies have approved the transaction, though it is subject to customary closing conditions, including a vote of Kayak’s shareholders, and of course, regulatory approval.

Priceline says it expects the deal to close by late first quarter 2013.

Kayak processes over 100 million user queries per month.