TUI Travel and TUI AG move closer to merger
The terms of the TUI Travel and TUI AG merger have been finalised and are ready to be put to the shareholder vote at the end of next month.
The merger is expected to result in existing TUI Travel shareholders owning 46% of the combined Group and existing TUI AG shareholders owning 54% of the combined group, taking into account TUI AG’s existing stake in TUI Travel.
The combined group would be worth approximately £5.2 billion.
Peter Long and Friedrich Joussen are to be joint CEOs of the combined group, with Peter Long to become chairman of the supervisory board of TUI AG and Friedrich Joussen becoming sole CEO of the combined group from February 2016.
The merger will result in the creation of ‘the world’s number one integrated leisure tourism business, clearly positioned as a fully vertically-integrated tour operator with enhanced long-term growth prospects’, claims TUI.
Through corporate streamlining, potential cost savings of at least £36 million per year are expected.
TUI says the merger ‘enhances the certainty of supply’ for the continued growth of Unique Holidays.
It will also allow double the pace of existing TUI AG content growth through vertical integration – more than 30 additional hotels and up to two additional cruise ships.
Commenting on the merger, Sir Michael Hodgkinson, deputy chairman and senior independent director of TUI Travel, said: "By simplifying the structure and combining the two businesses substantial synergies and cost savings will be realised. In addition, the potential to deliver material commercial benefits will be unlocked.
"Peter Long’s position as, firstly joint chief executive with continued responsibility for the former TUI Travel businesses, and then in 2016 as chairman of the supervisory board should also serve to give TUI Travel shareholders confidence in the long-term prospects for the group."
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.
"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."
The merger will now be voted on by TUI Travel shareholders at the end of October and hopes to complete by the end of the year.
Diane
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