Peter Rothwell has revealed how last month’s shock announcement that Thomas Cook and MyTravel were to merge sparked an immediate reaction from rivals Thomson and First Choice.
TUI Northern Europe chief executive Peter Rothwell contacted First Choice chief executive Peter Long minutes after hearing about the Thomas Cook/MyTravel deal.
He was flying to Hanover to meet TUI chief executive Michael Frenzel on the morning of February 12 and heard the news after his flight touched down.
“I called Peter Long and said we should talk,” he said.
By Wednesday, Frenzel, Rothwell, Long and First Choice chairman Sir Michael Hodgkinson had met in London to thrash out the £4.5 billion deal that, subject to regulatory approval, will create TUI Travel, Europe’s largest tour operator.
Long said: “When consolidation happens people decide how they are going to take the opportunities that arise. The thought was in both our minds that we needed to have a discussion.”
Long believes the management structure, with himself at the helm, First Choice group financial officer Paul Bowtell retaining his position, on Long’s insistence, and Rothwell as deputy chief executive, will ensure the deal is seen by the City and First Choice shareholders as a merger.
“We have to bring two shareholder groups together and I’ve got to convince my shareholders of the credibility I have in the financial community. It was mutually agreed by both sides that I was the right guy to head it up,” Long said.
Rothwell said he was not concerned about reporting in to Long having run TUI Northern Europe, a bigger company than First Choice, claiming Long was given the job to please the London Stock Exchange.
The facts
- Peter Long, Peter Rothwell, Michael Frenzel and Paul Bowtell will be joined on the board by three TUI executives: Will Waggott, commercial director; Christopher Mueller, aviation director; and Volker Bottcher, central Europe managing director.
- Frenzel becomes non-executive chairman with the four non-executive director roles taken by existing non-executives of First Choice.
- TUI Travel will be listed on the London Stock Exchange but TUI AG will own 51% of the enlarged company and include the firm’s financial results in its accounts.
- First Choice shareholder approval is required but TUI shareholder approval is not.
- The merger is expected to result in £100 million of annual savings within three years.