The owner of Thomson and First Choice has completed a merger with its German parent company to create the world’s largest tour operator.
Yesterday’s confirmation of the tie-up, which involves UK-based Tui Travel and Germany’s Tui AG, has produced a business with more than 300 hotels, 136 planes and 1,800 shops across Europe selling holidays to 30 million customers in 180 countries. Costs savings and tax benefits are expected to amount to some €170 million (£135m).
Shares in the newly created company began trading on the London Stock Exchange with a market value of some £5.6 billion.
Tui Travel boss Peter Long, who is now joint chief executive of the merged business, called it a “fantastic day” for the group after becoming the world’s number one integrated leisure tourism business.
He added: “Personally, I am very excited about what the future holds and the opportunities that lie ahead for us as Tui Group.”
The merger has been on the cards since 2007 when Tui Travel was created through Britain’s First Choice holidays and the tourism business of Tui AG. The German parent owned just over half of Tui Travel.
A merger attempt was made in early 2013 but the deal collapsed over price.
Long will move to become chairman of Tui’s supervisory board in February 2016, leaving Friedrich Joussen as sole chief executive.
Joussen said: “Under the roof of the new Tui Group we want to grow and increase our international market position.”
Tui Travel shareholders have received 46 per cent of the combined group, while the deal received the backing of Russian billionaire Alexey Mordashov, who was Tui AG’s largest shareholder with a 25 per cent stake.
Shore Capital analyst Greg Johnson said the enlarged business was now in a position to raise cash by selling non-core parts of the firm such as container shipping and accommodation services.
He added: “We see significant scope for strong earnings growth over the medium-to-long term reflecting the continued growth in the core Tui Travel, delivery of new cruise ships, improving hotel occupancy, new hotel resorts and refinancing the balance sheet.”
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