Agreement comes after long talks between the two
Tui Travel and Tui AG have agreed to the terms of a €6.5 billion merger, TTG Digital reports. The agreement comes after talks between the two companies were first announced in June.
A tie-up between the two businesses had been predicted by investors since 2007, when Tui Travel was first created following the merger of First Choice and Tui AG, which now owns around 55% of the company.
The two businesses said the deal would result in potential cost savings of at least €45 million a year as they reduce overlapping functions. The merged group will be based in Germany, have a premium listing on the London Stock Exchange and have a secondary market quotation on a German stock exchange. Alexey Mordashov, Tui AG’s largest shareholder, confirmed his support for the merger.
Peter Long, chief executive of Tui Travel and member of the executive board of Tui AG, said: “The merger will strengthen and future-proof our combined business by enhancing the certainty of long-term unique holiday growth, and by reinforcing our competitive advantage through further control over the end-to-end customer experience.”
He added: “[Tui AG CEO and Tui Travel Chairman] Friedrich Joussen and I are committed to working closely to ensure that we achieve significant synergies, cost savings, commercial benefits and long-term growth as the world’s number one integrated leisure tourism business. All of which will contribute to significant earnings accretion from the first full financial year post-completion and growth in shareholder returns.”
[pictured: Tui HQ in Hanover; photo courtesy Tui AG]