Thomas Cook, The Co-operative Group and Midlands Co-operative have welcomed clearance of their merger by the Competition Commission today.
The three issued a short statement this morning, but declined to comment further. The merger will create the UK’s biggest high-street travel chain and should be concluded within six weeks.
The Commission said in a statement: “In its final report published today, the CC has concluded that the acquisition will not result in a substantial lessening of competition in any markets in the UK, in particular for customers buying package holidays from high street travel agents.
“Therefore customers are unlikely to suffer from significantly higher prices or reduced choice as a result of the joint venture.”
The Commission extended the deadline for the inquiry last month in case the time required to consider any comments took it past the original deadline of August 16.
However, it said responses were received well before the end of the consultation period and it has now published the final report within the original timescale.
Confirmation of the provisional clearance on July 21 allows the merger to proceed “without remedies” – meaning without the forced disposal of any outlets – and will create a high-street chain of more than 1,200 shops.
Thomas Cook will contribute 780 shops, The Co-operative Travel 360 and Midlands Co-operative 100, with Thomas Cook saying it will close no more than about 75 as a result of overlap among outlets. The Going Places brand will disappear with shops rebranded as The Co-operative Travel.
The joint venture will include The Co-operative Personal Travel Advisors (home workers) and Freedom Travel franchise, but not Thomas Cook’s online travel agency or tour operator businesses. It will be majority-owned by Thomas Cook, which has guaranteed a dividend of £10 million a year to the Co-operative Group for four years.
The merger is likely to be concluded by October. Thomas Cook has already said it does not expect shop closures to proceed until next year. A spokeswoman dismissed a report at the weekend suggesting the group was considering hundreds of shop closures.
The Commission was charged with deciding whether the merger would reduce competition in the UK. It considered pricing, noting it could “not rule out the possibility of some price rises in local areas”, and whether the merged group might favour Thomas Cook holidays at the expense of independent tour operators. It concluded any impact would be “small”.