Britain's TUI Travel says in merger talks with Germany's TUI

16th January 2013, Comments 0 comments

TUI Travel, Europe's biggest tour operator, announced on Wednesday that it was in merger talks with German tourism giant TUI, which already owns more than half of the London-listed firm.

"The independent directors of TUI Travel are aware of recent speculation and are making this announcement in the interests of market clarity," TUI Travel said in a brief statement.

"The independent directors of TUI Travel have recently received an approach from TUI AG which may or may not result in a combination of the two companies.

"Discussions are at a very early stage, but are on the basis that any such combination, if effected, would be achieved not by a reverse takeover but by means of a nil premium all-share merger," it added.

In reaction to the news, TUI Travel's share price soared 6.36 percent to 299.20 pence in late afternoon deals on London's FTSE 100 index of top companies, which was 0.27 percent lower at 6,100.64 points.

TUI Travel was created in late 2007 from the merger of British travel group First Choice and the tourism activities of Germany's TUI.

Frankfurt-listed TUI Group AG remains TUI Travel's biggest shareholder with a 56.44-percent stake.

The British-based travel firm had announced last month that its annual net profits surged by 62 percent on the back of deep cost-cutting and keen demand in Britain, the Nordic region, Belgium and Canada.

Earnings after tax hit £138 million ($222 million, 170 million euros) in the year to September 30, compared with £85 million in the previous 2010/2011 financial year. Pretax profits meanwhile jumped 40 percent to £201 million.

Sales however slid two percent to £14.46 billion, hit by the impact of unrest in the Middle East and unfavourable foreign exchange movements.

© 2013 AFP

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