Experts believe interest will come from private equity buyers
Swiss travel company Kuoni Group has announced that it will sell its tour operating business. In a shock announcement, it said the move was part of a plan to “focus the company’s activities on its core business as a service provider to the global travel industry and to governments”.
The decision will affect the company’s operations across the world, in a division that employs around 3,800 people. Kuoni will seek new owners during the course of the year but stresses that customers will not be affected.
“We are committed to further developing our core business and to rapidly and sustainably growing our core business as a leading service provider for the global travel industry,” explained chief executive Peter Meier. “We will offer our customers, partners and suppliers attractive and competitive services and solutions that allow them to provide their clients with a smooth travel experience.”
Financial buyers on both sides of the Atlantic are expected to lead the chase for Kuoni’s tour operating division. The Swiss travel group has already put the segment up for sale. Industry experts believe there will be considerable interest from private equity buyers, with trade interest predicted to be thin.
“There would be limited strategic interest from corporate acquirers in Europe and North America, but there would be very widespread interest from the private equity community without a question,” said James Lever, partner at Livingstone Partners.
Kuoni is looking to dispose of its entire tour operating unit, which makes up about 40% of the total business with the rest covering destination and accommodation services and visa processing. According to preliminary results for 2014, Kuoni Group’s turnover fell by 2.8% to £3.6 billion (€4.65 billion). Outbound Nordic and Outbound Europe/Asia (the tour operating unit) saw turnover fall 8.7% to £1.4 billion (€1.8 billion).
[photo courtesy Kuoni Group]