TUI Travel, TUI AG revive merger plans to create travel giant
Reuters
Published Jun 27, 2014 15:47
FRANKFURT/LONDON (Reuters) - Europe's biggest tour operator TUI Travel (L:TT) and majority owner TUI AG (DE:TUIGn) plan to merge in an all-share, nil-premium deal as they seek to cut costs and create the world's largest leisure tourism group.
TUI Travel, which is around 55-percent owned by German travel and tourism group TUI AG, said a deal would result in potential cost savings of at least 45 million euros (36.05 million pounds) a year.
Under the plan, TUI Travel shareholders would receive 0.399 new TUI AG shares.
Alexey Mordashov, the largest shareholder in TUI AG and who has previously pushed for a tie-up between the two, has indicated his support for the deal.
Under the deal, the new group would be incorporated and headquartered in Germany, but would seek a share listing on Britain's blue-chip FTSE 100.
The firms said a firm merger offer would be made after mid-September, with closing expected by spring 2015. Talks are still ongoing and there is no certainty any deal will be reached, they said in a joint statement.
Shares in TUI Travel were up 3.8 percent at 405 pence, while shares in TUI AG were up 4.7 percent at 12.50 euros at 1434 GMT (03.34 p.m. BST).
The current heads of TUI AG and TUI Travel, Friedrich Joussen and Peter Long, will act as joint chief executives of the merged group until February 2016, with Long to then become chairman and Joussen to continue as CEO.
Combined, the groups' mainstream leisure tourism businesses would have annual revenues of 13.4 billion pounds and earnings before interest and tax and amortisation (EBITDA) of 706 million pounds.
TUI Travel is being advised by Lazard, Bank of America Merrill Lynch and Barclays, while Deutsche Bank and Greenhill are advising TUI AG.
(Reporting by Victoria Bryan; Additional reporting by Kate Holton; Editing by Pravin Char)
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Written By: Reuters
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