TUI Travel to merge with parent to create £5.2-bn tourism giant
16 Sep 2014
Thomson and First Choice holiday firm owner TUI Travel would merge with its German parent company TUI AG to create the world's largest tour operator, valued at £5.2 billion, Herald Scotland reported.
The nil-premium all share merger comes after the firms first announced talks in June.
The merger would see TUI Travel, which serves 30 million customers join TUI AG, owner of 230 hotels and seven cruise ships.
According to the firms, the merger would allow the enlarged business to offer more holidays, add up to 30 more hotels and two cruise ships, and save at least £36 million a year.
Merger suggestions had been first made in 2007 with the creation of TUI Travel through the merger of the UK's First Choice holidays and the tourism business of TUI AG. The German parent currently owns only over half of TUI Travel.
Earlier, a merger attempt in 2013, had failed over price.
Veteran TUI Travel chief executive Peter Long and TUI AG boss Friedrich Joussen would manage the enlarged business as joint chief executives. Long would become chairman of TUI's supervisory board in February 2016, leaving Joussen as sole chief executive.
The combined business would list on the London Stock Exchange but would be headquartered in Germany.
The company looks to increase earnings by adding more hotels and boosting occupancy rates, Joussen said, www.independent.ie reported.
According to Joussen the main purpose of the merger was to future-proof the business. He added, cost synergies were very certain.
The companies said the new company would list on the London Stock Exchange, with a secondary quotation in Germany.
TUI planned to add 60 hotels by fiscal year 2019, adding to the 232 lodgings it had today.
This was up from an earlier forecast for 30 new openings. New hotels had contributed around €1.4 million each to operating profit, the company said. The company said, the merger would also allow TUI to add more cruise ships.
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