Thomas Cook Merges With MyTravel
FEBRUARY 12, 2007. Germany's Thomas Cook is to merge with British rival MyTravel to create one of Europe's largest leisure travel companies.
The two parties jointly said the merged entity "will have leading positions in the U.K., Ireland, Germany, Scandinavia, Benelux, France and Canada."
Under the terms of the merger, KarstadtQuelle - who owns Thomas Cook -- would hold a 52-percent stake in the joint entity, to be called Thomas Cook Group Plc. Both will be headquartered and listed in London.
"The enlarged group will also benefit from a portfolio of excellent brands, an experienced management team with a proven track record and a diverse geographic spread, which together will provide a strong platform for growth," the two companies said in a statement. The merger is expected to completed by June 2007.
Full statement
o The boards of MyTravel and KarstadtQuelle are pleased to announce that they have agreed the terms of a recommended merger of MyTravel and Thomas Cook. The parent company of the Enlarged Group will be named Thomas Cook Group plc, headquartered in the UK and listed in London. The Merger is expected to create significant value for shareholders.
o The Enlarged Group will have leading positions in the UK & Ireland, Germany, Scandinavia, Benelux, France and Canada. The Enlarged Group will also benefit from a portfolio of excellent brands, an experienced management team with a proven track record and a diverse geographic spread, which together will provide a strong platform for growth.
o MyTravel and Thomas Cook believe that the annualised pre-tax cost benefits arising from a combination of the businesses will be at least lb75 million per annum once the full benefits of the Merger are realised.
o The terms of the Merger will result in the Enlarged Group being 52 per cent. owned by KarstadtQuelle and 48 per cent. owned by the shareholders of MyTravel (calculated on a fully diluted basis.
o The Enlarged Group will be led by a board drawn from MyTravel, Thomas Cook and KarstadtQuelle, complemented by additional independent non-executive directors. The audit, remuneration and nomination committees will be chaired by independent non-executive directors. The Board will be independent of KarstadtQuelle and will include a strong and experienced executive management team.
o The Enlarged Group will be chaired by Thomas Middelhoff, CEO of KarstadtQuelle and Chairman of Thomas Cook, deputy chaired by Michael Beckett, Chairman of MyTravel, and managed on an interim basis by Joint Chief Executives Peter McHugh, Chief Executive of MyTravel, and Manny Fontenla-Novoa, Chief Executive of Thomas Cook.
o The Merger will be effected through the acquisition by NewCo of both MyTravel and Thomas Cook (MyTravel by means of a scheme of arrangement). It is expected that the Merger will be completed by June 2007.
o The Merger is conditional on the approval of MyTravel Shareholders. Shareholder approval will be sought at the Court Meeting and the Extraordinary General Meeting to be convened in due course. The directors of MyTravel intend unanimously to recommend to MyTravel Shareholders that they vote in favour of the Merger, as they intend to do in relation to their own shareholdings.
o In addition, the Merger is conditional on, among other things, competition clearances and completion of the transaction between KarstadtQuelle and Lufthansa pursuant to which KarstadtQuelle has agreed to acquire the 50 per cent. of Thomas Cook which it does not already own, which is itself conditional only on EU anti-trust clearance and the approval of Lufthansa's Supervisory Board.
o As a result of agreeing the Merger, MyTravel and KarstadtQuelle have agreed not to pursue any competing transaction.
Commenting on today's announcement, Michael Beckett, Chairman of MyTravel said, "This transaction gives MyTravel shareholders the opportunity to participate in the significant value creation being offered by industry consolidation. Thomas Cook is a household name and the joining of the two groups will create an even stronger force in this highly competitive market. The Enlarged Group, which will be based in the UK and listed in London, will benefit from a strong and independent board and an experienced executive team. "The new team is committed to realising significant benefits for the shareholders of the Enlarged Group."
Thomas Middelhoff, CEO of KarstadtQuelle and Chairman of Thomas Cook said,"We are delighted to see the merger of two such well established industry players which we are sure will achieve significant value creation for us as shareholders from this geographically diverse portfolio of companies. We look forward to being a long-term, committed investor in the Enlarged Group. "The Thomas Cook team is looking forward to building and growing the Enlarged Group together with the MyTravel team. The combined organisations will offer customers unrivalled choice and quality for their holiday and leisure time in all of the markets in which we operate."
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