KarstadtQuelle's Thomas Cook Acquires MyTravel

Posted 12 February 2007 @ 11:06 am EET     Print     Reprint     E-Mail     Comments

ESSEN, Germany (AP) - Thomas Cook, the second-biggest European travel group, is to merge with British rival MyTravel, the British group has said. "The boards of MyTravel and KarstadtQuelle have agreed the terms of recommended merger of MyTravel and Thomas Cook," it said in a statement released in Germany on Monday.

Under the terms of the merger, KarstadtQuelle would hold a 52-percent stake in the joint entity, to be called Thomas Cook Group Plc and both headquartered and listed in London. MyTravel's shareholders would hold the other 48 percent, the statement said. The transaction, the terms of which were considered "fair and reasonable" by the directors of MyTravel, was expected to be completed in June, pending the approval of the regulatory authorities.

MyTravel shareholders would also have to approve the deal, but MyTravel directors said they would "unanimously recommend" it to shareholders at an extraordinary general meeting. The merger was also conditional on the completion of the recent deal by KarstadtQuelle to buy the 50-percent stake in Thomas Cook held by German airline Lufthansa. The merged Thomas Cook group would have a leading position in Britain and Ireland, Germany, Scandinavia, the Benelux countries, France and Canada, the statement said.

The tie-up would cut costs by "at least 75 million pounds" (112 million euros, 146 million dollars) each year. The new Thomas Cook Group would have two chief executives Peter McHugh, current CEO of MyTravel, and is counterpart of Thomas Cook, Manny Fontenla-Novoa. Chairman would be KarstadtQuelle chief Thomas Middelhoff and his deputy would be Michael Beckett, chairman of MyTravel.

"Thomas Cook is a household name and the joining of the two groups will create an even stronger force in this highly competitive market," Beckett said. Middelhoff said: "The merger of two such well-established industry players will achieve significant value creation for us as shareholders from this geographically diverse portfolio of companies. We look forward to being a long-term committed investor in the enlarged group."