THE owner of the Thomson and First Choice holiday firms has agreed to merge with its German parent company to create the world's largest tour operator, valued at £5.2 billion.
TUI Travel will merge with Germany's TUI AG in a nil-premium all share merger, after the firms first announced talks in June.
The merger brings together TUI Travel, which serves 30 million customers, with TUI AG, which owns 230 hotels and seven cruise ships.
The firms said the merger will allow the enlarged business to offer more holidays, add up to 30 more hotels and two cruise ships, and make savings of at least £36 million a year.
A merger between the two groups has been mooted since 2007 when TUI Travel was created through the merger of Britain's First Choice holidays and the tourism business of TUI AG. The German parent currently owns just over half of TUI Travel.
A merger attempt was made in early 2013, but the deal collapsed over price.
The enlarged business will be run by veteran TUI Travel chief executive Peter Long and TUI AG boss Friedrich Joussen, who will become joint chief executives. Mr Long will move to become chairman of TUI's supervisory board in February 2016, leaving Mr Joussen as sole chief executive.
The combined business will be listed on the London Stock Exchange but will have its headquarters in Germany.
TUI Travel shareholders will receive 0.399 new TUI AG shares for each share that they own, giving them 46 per cent of the combined group. TUI AG investors will hold the remaining 54 per cent of the combined company.
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