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The Two TUIs Agree to Merge Creating World’s Largest Tour Operator

Jun 27, 2014 11:30 am

Skift Take

We are profoundly grateful that TUI AG of Germany will acquire the shares it didn’t already own in the UK’s TUI Travel because then we won’t have to try to figure out who’s who. The synergies would be enormous, could help stem TUI Travel’s losses.

— Dennis Schaal

The Latest Intelligence on the Travel Industry

Source: Company Merger Presentation

The two companies combining and the assets that it will have. Source: Company Merger Presentation

TUI AG and TUI Travel said they agreed on an all-share merger that would create the world’s largest leisure tourism company, reviving a combination that fell apart last year after the sides failed to come together.

The nil-premium merger would reap cost savings of at least $61.3 million, or 45 million euros, each year and would propel the combined entity to the top of the global tourism industry, the companies said today in a statement.

It would also simplify the structure and help push growth with a broadened portfolio, they said. Shares of both companies jumped after the announcement.

TUI, which already owns a majority in the U.K. company, had sought to combine with TUI Travel before retreating from the plan last year, saying at the time that a share-based deal would not be in TUI shareholders’ interest.

Under the plan proposed today, TUI Travel shareholders would receive 0.399 new TUI shares for each TUI Travel share that they own, according to the release. The company would be based in Germany and listed on the London Stock Exchange. Alexey Mordashov, the Russian billionaire who is the largest shareholder in TUI, supports the merger, the companies said.

TUI, based in Hanover in northern Germany, rose as much as 71 cents, or 5.9 percent, to 12.6 euros in Frankfurt, while TUI Travel, in which TUI owns 54.5 percent, advanced as much as 7.7 percent in London.

To contact the reporter on this story: Benedikt Kammel in Berlin at bkammel@bloomberg.net To contact the editor responsible for this story: Benedikt Kammel at bkammel@bloomberg.net

Presentation on the merger from the two companies, embedded below:

Download (PDF, 748KB)

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