Tui Travel has confirmed it has completed the purchase of all-inclusive group Magic Life Hotels.
The deal with German shareholder Tui AG was originally flagged in May and won shareholder approval on June 22.
It gives Tui six separate operating companies which lease and manage 13 holiday clubs – six in Turkey, three in Tunisia, two in Egypt, and one each in Greece and Spain.
Tui Travel is taking on €10.5 million of debt as part of the transaction for a business that made an operating loss of €10.3 million in the year to September 2010.
Planned operational improvements are expected to bring the companies to break even in 2012. Tui Travel said in May that it expected the transaction to have a positive impact on underlying operating profit in the second half of 2011.
The group intends to operate two of the Turkish clubs as Holiday Villages targeting UK families and a Blue Village for Scandinavian holidaymakers rather than under the Magic Life brand.
Tui said it believed this approach would increase the yield and occupancy ratios of the clubs and “maximise end–to–end profitability”.