The German retailer KarstadtQuelle AG merged its tourism subsidiary, Thomas Cook, with the British travel company MyTravel. The newly established company will be named Thomas Cook Group plc and will be traded on the…
The German retailer KarstadtQuelle AG merged its tourism subsidiary, Thomas Cook, with the British travel company MyTravel. The newly established company will be named Thomas Cook Group plc and will be traded on the London Stock Exchange. KarstadtQuelle will hold 52 percent in the new company and will consolidate it fully. The MyTravel shareholders will hold 48 percent.
KarstadtQuelle’s CEO will be the Chairman, whilst the Thomas Cook AG CEO will be joint CEO of the new company and the Thomas Cook AG CFO will be CFO of the new company. The merged company will achieve sales of approximately Euro 12 billion and will be a leader in Great Britain, Scandinavia and Canada with leading positions in continental Europe. It will be one of the largest travel groups in the world.
The merger is subject to approval from the anti-trust authorities and the shareholders of MyTravel plc as well as the final closing of the previously announced transaction with Lufthansa.
“The new tourism group will be free of debt, have high financial reserves and thus will be well positioned to proactively participate in further market consolidation in Europe, should we see the opportunity to increase value for our shareholders. As a result of the merger, we will generate significant synergies, which will improve the profitability of the new Thomas Cook Group plc on a sustained basis”, stated KarstadtQuelle AG CEO, Thomas Middelhoff, Chairman-designate of the new company.
“With the merger, KarstadtQuelle AG will achieve a considerable value increase for its shareholders. We will be creating an international retail and tourism group with total sales of Euro 21 billion with approximately 50 percent of revenues generated internationally,” added Middelhoff. The basis for the current merger was the recent agreement by which KarstadtQuelle acquired Lufthansa?s 50% stake in Thomas Cook.
According to KarstadtQuelle, the company’s shareholders will benefit in several respects from the transaction. Thomas Cook Group plc will be a listed company enabling greater transparency in market valuation and substantial synergies which will positively impact the KarstadtQuelle income statement. Furthermore, the new company will directly benefit from the MyTravel tax loss carried forward of approximately Euro 1.2 billion.
KarstadtQuelle AG remains free of financial debt, taking into account the ongoing real estate transaction.
The Thomas Cook AG CEO, Manny Fontenla-Novoa, who will be joint CEO of the new company, stated, “We believe in the future of the mainstream package holiday market, which will continue to be a core product of our ongoing business strategy. An immediate priority of the group will be to grow the independent travel, online and financial services segment of the business, where we see significant growth opportunities.”
Over an interim period, Mr. Fontenla-Novoa will manage Thomas Cook Group plc together with the current CEO of MyTravel, Peter McHugh, who will retire on 31, December 2007. The CFO of the new company will be Ludger Heuberg, who is currently the Finance Director of Thomas Cook AG.
Thomas Cook AG recorded sales of 7.8 billion euro and an operating profit (EBITA) of 228 million euro in 2005/2006. The foundation of the group being merged with MyTravel today was laid in 1998 by Deutsche Lufthansa AG and KarstadtQuelle AG bringing together Condor Flugdienst GmbH with NUR Touristic GmbH (today TC Touristik GmbH). They then grew the group with the acquisition of French travel company Havas Voyages in July 2000 and the take-over of the British travel group Thomas Cook Holdings Ltd in April 2001. KarstadtQuelle acquired Lufthansa’s stake at the end of 2006 to make it a 100% owned subsidiary. Thomas Cook AG has leading positions in the UK, Ireland, Germany, France, Benelux and Eastern European markets.
MyTravel Group plc is the third largest tour operator in the UK, after Thomson/TUI and Thomas Cook UK. In 2006, the company generated sales of 2.8 billion pounds (Euro 4.2 billion). Its geographical focus is in the UK, Northern Europe and the USA. The group was founded in 1972 under the umbrella of Airtours, and commenced operations of its own airline at the beginning of the 1980s. In the 1990s, there were purchases of several travel companies, including the Scandinavian Leisure Group with the operator Ving and the airline company Premiair. In 2002, Airtours was renamed MyTravel Group.
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