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Thomas Cook confirms future focus on travel and sale on financial services

Thomas Cook<.> confirmed its plans to concentrate further on building its travel business by announcing the sale of…

Thomas Cook<.> confirmed its plans to concentrate further on building its travel business by announcing the sale of its Global & Financial Services division to Travelex for $440million. The transaction is subject to regulatory approvals, including the approval of the European Comission.

The sale of Thomas Cook`s Global & Financial Services business follows a major strategic review undertaken by the company in 1999. The review concluded that the company`s long-term interests would be better served by focussing its efforts on building its core travel businesses.

For the past twelve months Thomas Cook has undergone a process of separating the Travel and Global & Financial Services businesses, and pursuing a strategy in its Global & Financial Services division focussed on identifying new shareholders for the business.

Marilyn Carlson Nelson, Chairman of the Thomas Cook Holdings Board, said: We are very pleased to be passing to Travelex what is a highly successful and profitable business, and to achieving a deal which we believe is in the best interest of staff and customers.

John Donaldson, Chief Executive, Thomas Cook Holdings, added: Travel has always been at the very heart of our business. It`s what we do best. The sale of the Global & Financial Services business will allow us to concentrate on building our core travel business in the UK and a number of other international markets, and enable us to put significant funding behind driving forward our ambitions e-commerce development agenda.

Through a separate agreement with Travelex, Thomas Cook`s travel Business will continue to offer foreign exchange, trevellers cheques, money transmission and global services to its customers, addes Mr Donaldson.

Thomas Cook has grown its UK Travel business significantly since 1996 when it first stated its intention to become one of the UK`s largest vertically integrated travel groups. At that time the company had just 385 high street travel shops and a growing telephone-based travel operarion, Thomas Cook Direct. It went on to acquire Sunworld, who was then the Uk`s fourth largest tour operator, and subsequently bought the Flying Colours travel group. It then Merged its businss with the UK travel interests of Carlson Companies Inc.

Today, as well as having travel operations in a number of overseas markets, Thomas Cook is the UK`s third largest vertically integrated travel group with: an airline fleet of 28 aircraft; tour operating programmes they carry over 3.5 million customers a year: 700 travel shops and four Thomas Cook Direct call centres. It also owns many of the most famous brands in travel, including Thomas Cook, JMC, Club 18-30 and Neilson.

The company is also a leading player in internet and digital TV development through building its highly successful Internet business in the Thomas Cook, which has always been an early mover in innovating new distribution channels, launched the site in 1996 to provide customers with a broad leisure retailing offering on-line. The sales volumes that are now being generated through the site ensure that Thomas Cook is well positioned in relation to its traditional high street travel agency competitors, and its aim is to continue to be the leading online travel retailer in the UK.

This deal precedes any announcement on Thomas Cook`s overall shareholding position. Preussag is currently in the process of divesting of its 50.1 per cent shareholding in Thomas Cook in order to allow its subsequent acquisition of the Thomson Travel Group. Given Westdeusche Landesbank`s relationship with Preussag, it also has to divest of its 27.9 per cent shareholding. Both organisations are currently in discussions with Carlson Companies Inc., who own 22 percent of Thomas Cook, and who has an opinion to acquire the shares available.

In a relatively short space of time we have built a very strong and profitable vertically integrated travel business in the UK, and have exciting plans to grow the business even further. The next phase of our development is to identify the best possible shareholding structure for our travel business going forward, one that will give us the opportunity to compete even more effectively in an industry that is experiencing a great deal of change, added Mr Donaldson.

The portfolio of business that will transfer to Travelex as part of the deal include: an international Corporate Foreign Exchange business, which offers international payment services for corporate customers; Global Services, a worldwide traveller assist business, a consumer money transmission business, MoneyGram; prepaid card services through Visa TravelMoney; a wholesale Travellers Cheques operation and a network of over 300 foreign exchange bureaux including a presence at over 30 major airports and ports.

All branded Thomas Cook bureaux will continue to offer foreign money, travellers cheques, consumer money transmission and offer related products. As parts of the deal Travelex has the right to trade under the Thomas Cook brand for a period of time in the categories in which the Global & Financial Services business operates.

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