KEY POINTS:
LONDON - MyTravel cemented its recovery from the ashes of Airtours yesterday with a £2.8 billion ($8 billion) deal to merge with its European arch rival Thomas Cook.
Despite the fact that the deal creates a group with an estimated 35 per cent share of the UK package holiday market, European competition regulators are tipped to wave through the deal rather than risk a repeat of the fiasco that has left Brussels facing a multimillion-pound lawsuit for blocking the 1999 tie-up between the then Airtours and First Choice.
Jobs across the UK are at risk from the deal, which is a defensive move to compensate for the slow death of the package holiday as consumers instead opt to book their own trips.
The merger, which will see Thomas Cook return to the UK stock market after a six-year break, is expected to save the enlarged group at least £75 million a year once the integration process is complete in 24 months' time.
The new company - Thomas Cook Group - is expected to close travel agencies, get rid of aircraft and even axe holiday brands to wring savings out of the deal. It will also be able to cut capacity, which will shore up embattled profit margins.
Cook's decision to swoop on MyTravel (its German owners, the retail consortium KarstadtQuelle, will control 52 per cent of the enlarged share capital) put paid to First Choice's hopes of offloading its own mainstream holiday business.
First Choice was forced to admit yesterday that talks to sell its biggest division had ended after its two keenest suitors opted to tie their own knot.
- INDEPENDENT
