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TUI AG, Europe’s largest tour operator, said it will sell its Specialist Group activities as part of a process of focusing on its mainline tourism operations following the disposal of the Hotelbeds Group unit last month.
The Specialist unit comprises more than 50 travel brands, which generated 1.84 billion euros ($2.1 billion) in revenue and 56.2 million euros in underlying operating profit last year. TUI intends to sell the portfolio, retaining only the Crystal Ski and Thomson Lakes & Mountains businesses, which help fill its U.K. fleet of aircraft in the winter months.
“There is little vertical integration with the core tourism businesses,” Chief Executive Officer Fritz Joussen said in a statement. “In addition, the potential impact on profitability and the large amount of brands are strong strategic arguments not to combine the portfolio under the TUI brand.”
TUI on April 28 said it agreed to sell its Hotelbeds unit to funds managed by Cinven Ltd. and the Canada Pension Plan Investment Board for 1.19 billion euros. The sale of the unit, which sells accommodations wholesale to travel agencies, is expected to be completed by the end of September
TUI’s group revenue in the quarter ended March 31 rose 1.1 percent to 3.29 billion euros. The seasonal loss, measured as underlying earnings before interest, taxes and amortization before currency fluctuations, narrowed to 131.7 million euros from 176.7 million euros a year ago.
©2016 Bloomberg L.P.
This article was written by Richard Weiss from Bloomberg and was legally licensed through the NewsCred publisher network.