The Hindu Business Line : Thomas Cook buying 74.9% stake in Indian arm for Rs 1,543 cr

Other acquisitions
Thomas Cook UK is also acquiring 100 pc of Thomas Cook branded businesses in Egypt, as well as licences for the Thomas Cook brand in 15 West Asian countries for €35 million.

Our Bureau

Mumbai, March 7

Thomas Cook UK said on Friday that it is acquiring 74.9 per cent stake in Thomas Cook India Ltd (TCIL) at an investment of up to €249 million (about Rs 1,543 crore).

The deal includes buying back of 54.9 per cent stake in the Indian company from Dubai Financial Group at a price of Rs 107 per share and an open offer to the Indian shareholders for another 20 per cent of the shares.

Thomas Cook UK had sold its stake in TCIL to Dubai Financial Group in 2005 for $127 million.

In a notice to stock exchanges, TCIL said the UK company plans to acquire between 61.8 per cent and 74.9 per cent in TCIL, which will give it controlling stake in the company. The total cost of the transaction will range between €173 million (Rs 1,072.6 crore) and €214 million (Rs 1,326.8 crore)

This acquisition has a strategic importance to the Indian company as Thomas Cook UK will focus on the growing Indian tourism market, while for the Dubai company it was only financial investment.

For Thomas Cook India, 60 per cent of the revenue comes from forex business and the balance from tour operations. TCIL is the largest foreign exchange operator in the country with a market share of about 50 per cent.

Thomas Cook UK is also acquiring 100 per cent of Thomas Cook branded businesses in Egypt, as well as licences for the Thomas Cook brand in 15 West Asian countries for €35 million.

This acquisition will help Thomas Cook in its strategy to expand into emerging markets which have growth potential and will also help strengthen its financial services business, said a press release from the company.

The transactions are expected to close at the end of March and the open offer for up to a further 20 per cent will close at the end of May.

TCIL reported a 56 per cent increase in its net profit at Rs 5.44 crore for the third quarter ended July 31, 2002, compared to Rs 3.49 crore in the year-ago period. It employs around 2,500 staff and has a network of 180 outlets across 52 cities.

Shares of TCIL closed at Rs 88.5 on the BSE on Friday, up 4.98 per cent from the previous close of Rs 84.3.

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