THE famous Thomas Cook brand is heading East after the 174-year-old travel firm yesterday agreed to form a joint venture selling holidays under its name in China’s booming economy.
City leisure analysts said the deal with the Fosun conglomerate, based in Shanghai, will see the group try to cash in on that country’s huge £85 billion tourist market.
Thomas Cook said the agreement means it will sell domestic, inbound and outbound holidays in China through a business that will be 51 per cent owned by Fosun, with the British company holding the remainder of the stock.
The companies revealed they would make a combined cash contribution to the venture of £1.6 million, each paying about half, to bankroll the initial start-up phase of the business.
They said the new operation would fuse Thomas Cook’s heritage and expertise in international travel with Fosun’s knowledge of the local market.
The move comes hard on the heels of Fosun agreeing to buy a 5 per cent holding in Thomas Cook in March for £91.8m, which both groups said at the time would lead to closer links.
Fosun, founded in 1992, is led by billionaire Guo Guangchang, who has been described as China’s Warren Buffett, with a fortune estimated to be worth £2.8bn.
Peter Fankhauser, Thomas Cook’s chief executive, called the tie-up a “milestone” in his group’s partnership with Fosun.
“We are excited at the prospects of entering the largest and fastest-growing tourism market in the world with such an experienced partner,” he said.
Qian Jiannong, president of Fosun’s tourism and commercial group, said: “Today, there is a lack of innovation and differentiation in the travel product offerings for Chinese tourists in China and abroad, presenting an excellent opportunity for our new joint venture to gain a competitive advantage.”
The venture will be led by Thomas Cook’s current managing director of its eastern and western European businesses, Reto Wilhelm, who will take up the new position of general manager.
It comes as the UK travel firm has been engulfed in controversy over its handling of the 2006 tragedy that saw two British children, Bobby and Christi Shepherd, die of carbon monoxide poisoning during a Thomas Cook holiday in Corfu.
Last month, an inquest jury ruled that the children had been unlawfully killed and concluded that Thomas Cook breached its duty of care to the family.
• The London Stock Exchange yesterday announced that it has been granted regulatory approval from Hong Kong’s Securities & Futures Commission to allow companies from Hong Kong to become members of its market.
Alexander Justham, chief executive of the London Stock Exchange, said: “This is a significant development in further deepening the ties between London, Hong Kong and China.
“As members of the London Stock Exchange, Hong Kong firms will be able to offer their customers access to the most liquid European market.”