Fosun Sells Thomas Cook to Private Equity-Backed eSky: 8 Takeaways

Fosun is offloading Thomas Cook to eSky, a Poland-based online travel agency group, for up to $39.5 million (£30 million). The deal excludes Thomas Cook’s China business.

It’s a relatively quick exit for Fosun, China’s biggest private sector conglomerate. Fosun had been a minority shareholder in Thomas Cook since 2015 and took it over in 2019 after the brand’s high-profile collapse under heavy debt.

Key Points

• Thomas Cook had been a full-service tour operator competing with TUI. It relaunched as digital-only after its 2019 bankruptcy. It focuses on cheap holidays.

• ESky is backed by private equity firm MCI Capital, which sees this bolt-on deal as a way to complment Thomas Cook’s hotel expertise with eSky’s flight sales focus.

• Its CEO, Alan French, is a long-time technology director across industries and is staying on.

The Big Picture: 8 Takeaways

1. This is an expansion play. ESky is aiming to expand its package holiday business in Western Europe. The deal fits the brand’s strategy of diversifying beyond flights into vacation packages across its existing markets in Central and Eastern Europe and Latin America via its eSky and eDestinos brands.

2. Packages are more profitable than flights alone. ESky expects the deal to boost package sales by over €230 million next year. Its 2023 profits were approximately $23 million (£18 million).

3. Thomas Cook isn’t profitable. But it narrowed losses in 2023. It expects a profit this year. For Thomas Cook, the deal offers growth potential through eSky’s flight inventory, reducing costs of acquiring flights to bundle with hotels.

4. But eSky faces challenges in reviving a tarnished brand. Thomas Cook’s 2019 insolvency left a sour taste for many travelers who were left stranded. And the package holiday model faces headwinds from independent booking.

5. Private equity is playing a larger role in travel every day. Last year, MCI Capital, a private equity firm focused on Central and Eastern Europe, took majority control of eSky, eyeing consolidation opportunities. This bolt-on fits that playbook.

6. The future’s unclear. For analysts, the key question is whether eSky can successfully integrate Thomas Cook’s brand equity with its own technology platform. Execution risks abound in cross-border travel deals.

7. Chinese divestments may put more travel assets in play: Fosun is shedding non-core assets to shore up finances by reducing debt. Fosun made a small profit by buying and flipping the Thomas Cook brand. It bought it for £11 million, but five years later, it is selling the non-China business for three times that price. Fosun also owns Club Med and other hotels and resorts.

8. The Thomas Cook acquisition highlights the enduring value of legacy brands. Expect private equity to eye other names with recognition that may have faded because of execution issues. The transaction suggests traditional travel brands still hold value, even in a digital-first world.

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