Besides, the British travel giant will buy 100% of Thomas Cook-branded businesses in Egypt and licences for the brand in 15 Middle Eastern countries.
UK travel services says it has major plans for India, Russia and China
MUMBAI: Thomas Cook Plc will pick up a majority stake in its domestic unit — Thomas Cook India Ltd (TCIL) — as part a series of measures aimed at expanding in fast-growing emerging markets and regaining control of its trademark.
Besides, the British travel giant will buy 100% of Thomas Cook-branded businesses in Egypt and licences for the brand in 15 Middle Eastern countries.
Thomas Cook may pay about Rs 1,336 crore for TCIL.
It will acquire 54.9% stake from Dubai Financial Group (DFG), which currently has 62% stake, at Rs 107 a share. This values the deal at about Rs 944 crore. Sources said DFG has exited at an opportune moment since it will make more than double the amount it paid for the TCIL stake two years ago.
As per Sebi guidelines, Thomas Cook may make an open offer for 20% additional TCIL share. This means, Thomas Cook will acquire between 61.8% and 74.9% of TCIL’s share capital, valuing the entire deal between €208 million and €249 million.
Manny Fontenta-Novoa, group chief executive, Thomas Cook Group Plc, said: “Adding what is one of India’s largest travel and financial services businesses to our portfolio will allow us to take full advantage of the growth prospects that this market offers and fully supports our strategy of entering emerging markets and expanding our financial services businesses.”
Thomas Cook can boost the Indian division’s sales more quickly than Dubai Financial because it can offer local travelers a wider variety of European destinations, Fontenla-Novoa said.
Dubai Financial bought the Thomas Cook activities in 2006, before the merger last year that formed the current company. The units were sold by Thomas Cook AG, the travel unit of German department-store owner Arcandor AG, which combined in 2007 with MyTravel Group Plc. Arcandor is now Thomas Cook’s main investor.
And now fortunes have reversed completely. The new entity is the second largest travel company globally, growing stronger by expanding itself and entering emerging markets again.
Fontenla-Novoa told reporters in a conference call: “We have identified India, Russia and China, probably in that order.”
TCIL is the largest foreign exchange and second largest travel services company in India with 180 outlets in 40 cities. In the recent past, it acquired its biggest competitor in forex space, LKP Forex and also bought Travel Corporation of India. This has given immense boost to its business as well as market share. In forex services, TCIL commands more than half the market in India.
Udayan Bose, chairman, TCIL, told DNA Money: “There will no major changes except in the shareholding pattern as of now. We are already growing very strongly at about 25% annually and our revenues for this financial year are on target.” — with Bloomberg inputs
s_tanvi@dnaindia.net
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