The FTSE 100 travel group behind Thomson and First Choice has finalised the terms of a €6.5 billion merger with its German parent company that will deliver €167.5 million of cost and synergy benefits.
TUI Travel, which is 54 per cent-owned by TUI AG, said that the all-paper, nil-premium merger would create “the world’s No 1 integrated leisure tourism business” to the benefit of both companies.
Peter Long, the chief executive of TUI Travel, said that although there was no specific premium for smaller investors, there was an “implicit premium” because the deal would unlock the “trapped value” in the TUI AG share price.
Shareholders of the British company will receive 0.399 shares in the enlarged German group for each they hold in TUI Travel. The deal has been sweetened by a second interim dividend of 20½p per share, of which 10½p will be in lieu of a final dividend for the current financial year. This will be on top of the declared 4.05p interim payout. Shares of TUI Travel added 5½p to 365¾p.