After many years of speculation that Tui and Tui Travel would become one, it is finally happening. German travel company Tui says that it is going to merge with its UK subsidiary, Tui Travel. Doing so is going to result in a number of benefits for the two companies. For example, they will save nearly €45 million a year.
This merger should not be too hard for the two companies to work out. After all, Tui already owns just over 55 percent of Tui Travel. After the announcement that the two companies would be merging, shares for both companies started to increase. In Germany, shares for Tui went up 3.5 percent. In the UK, shares for Tui Travel went up 4 percent. This just further proves that many people support the merger plans or at least think that it’s a good idea.
In a joint statement released by the two companies, they said that the independent directors for Tui Travel and the executive board of directors for Tui, are very pleased to announced plans for the two companies to merge together. Both companies have reached a mutual agreement. This is going to be a great move for both entities.
As a result of this new merger, Tui Travel said that its shareholders are going to receive 0.3999 new Tui shares for every Tui Travel share that they own. This company merger is going to see the headquarters for both companies move to Germany. That being said, they are still going to keep their listing on the London Stock Exchange.
The largest shareholder of Tui, Alexey Mordashov, has already made it clear that he is going to support the merger in any way that he can. That being said, before the deal can go though, it still has to pass both German and UK regulatory approval. However, most experts do not think that this deal should have any problem.
These two companies have been discussing a possible merger since the start of last year. However, the talks eventually broke down without an agreement. Whatever was the holdup last year has finally been worked out. Since Tui Travel owns brands such as Airtours Germany, Laterooms.com and Thomson, these will belong to Tui as well.
There is no word yet on how soon this deal could be finalised or when regulatory authorities are going to comment on it. However, both Tui Travel and Tui are pushing for it pretty hard. It’s safe to assume that this deal is going to happen sooner rather than later.