Russia's Intourist, Thomas Cook create joint venture
Intourist, the company famed for dominating tourism in the days of the Soviet Union and legendary tour firm Thomas Cook are to join forces in a joint venture, Intourist's parent company said on Thursday.
Intourist will bundle all its tour operator and retail business into the joint venture with Thomas Cook, keeping only its hotel operations separate, its parent firm Sistema said in a statement.
It said that Thomas Cook's vast experience in the tourism, which dates back to 1841, would allow the joint venture to increase business through widening the portfolio of products on offer.
Intourist will have 49.9 percent in the joint venture while Thomas Cook will pay for its 50.1 percent stake with 10 million dollars in cash and 35 million dollars in shares.
It said an Intourist team would manage the joint venture but its financial director would come from Thomas Cook.
The Russian tour industry has been transformed since the collapse of the Soviet Union, with millions of Russians now able to consider trips to destinations that would have been unthinkable before.
Cyprus, Egypt and Israel are among the most popular short-haul destinations while the more well-heeled are able to afford package trips to more exotic locations in Asia.
Intourist was created in 1929 in the Soviet Union but was privatised in 1990 and is now owned by the AFK Sistema group of Russian businessman Vladimir Evtushenkov.
Intourist now has nine percent of the foreign tourism market in Russia and five percent of the market for Russians travelling abroad, according to business daily Vedomosti.
© 2010 AFP