Tui Travel and TUI AG have reached an agreement in principle to merge.
The companies said the “all-share nil-premium” merger would create “the world’s number one integrated leisure tourism business” and confirmed that existing management would continue to run the business.
The merger could deliver potential cost savings of at least £36 million through synergies in addition to tax benefits.
A statement said the combined business would also deliver enhanced top line growth by “broadening the portfolio of unique holiday experiences, increased occupancy levels in existing hotels, the future expansion of TUI AG’s core hotel and cruise activities and integrated yield management”.
The current online accommodation businesses and specialist and activity sector of Tui Travel will operate separately from the core tourism business. The company’s stake in Hapag-Lloyd would be held for disposal.
If the merger goes ahead, the joint business will be heading by Peter Long and Friedrich Joussen as joint chief executives until February 2016, when Jousen will become sole chief executive and Long will become chairman of the group’s supervisory board.
The statement said the board would have equal representation from both companies, with Long and Joussen joined by Tui Travel’s Johan Lundgren – deputy-group chief executive leading all mainstream markets, and Will Waggott – chief executive of online accommodation businesses and specialist and activity sector.
Tui AG would be represented by Horst Baier – Group CFO, and Sebastian Ebel – HR director with additional responsibilities for group platforms and processes including Hotels & Resorts, Cruises and IT.