Tag: takeover

Chinese conglomerate eyes Thomas Cook takeover

Chinese international conglomerate and investment company, Fosun International Limited, is reportedly considering a takeover of ailing UK-based travel firm, Thomas Cook.

A joint venture between the two companies is already in operation and Fosun is now reported to have lodged a preliminary interest in buying Thomas Cook’s tour operating business, the UK’s oldest provider. Fosun already has a varied range of businesses in its portfolio, including a sporting interest with its ownership of Wolverhampton Wanderers FC, an arts interest with its 24.5 percent share in Canada’s Cirque du Soleil theatre group, and an existing travel interest with its ownership of Club Med, a France-based luxury holiday company.

Fosun’s reported interest in the takeover, along with a number of other potential suitors, has seen a surge in Thomas Cook’s share value, which had been depressed of late as the company had struggled with its debts, compounded by a reduction in demand for package holidays and the effect of stiff online competition. Profit warnings posted in September and November 2018 had added to a fall of around 80 percent in the company’s share value over the past 12 months. It has recently announced plans to close 21 of its high street stores for a total of 320 job losses.

Meanwhile, Thomas Cook’s airline business was made the subject of a strategic review in February this year in an effort to create funds to invest in other aspects of its business portfolio. Thomas Cook is not the only travel company suffering financially at the moment, an industry-wide price war and a reluctance by customers to commit to major purchases due to economic uncertainty are issues that are also affecting most other large operators.

European Commission refuses Ryanair’s Aer Lingus takeover again

Ryanair, an Ireland-based no-frills airline, has had its latest attempt to buy out Ireland-based carrier Aer Lingus refused by the European Commission (EC).

The EC has again blocked the deal, ruling that Ryanair’s proposed solutions to previous objections raised by the Commission are, ‘inadequate.’ Ryanair’s response to the decision has been swift and scathing, describing it as, ‘a political decision to pander to the vested interests of the Irish government.’

The comment refers to the fact that the government in the Irish Republic owns a 25 percent stake in Aer Lingus, and does not want the budget carrier to take control of the company.

The ruling means that Ryanair’s third attempt in six years to complete a EUR694 million deal for Aer Lingus has again been thwarted, with the EC still concerned over possible monopolies that the combined entity would wield. This was despite Ryanair proposing to pay budget carrier, Flybe, to operate 43 of the routes currently flown by Aer Lingus, and to provide slots at Heathrow to British Airways owner, IAG, as part of which, BA would operate three routes between the UK and the Irish Republic for three years. However, the EC ruled that neither the involvement of Flybe or British Airways in a new allocation of routes would stop Ryanair from gaining a monopoly or dominant position on 46 routes where it currently had competition from Aer Lingus.

The EC said, ‘The remedies proposed fell short of addressing the competition concerns,’ adding, ‘Customers’ options would have been substantially reduced . . . Higher prices would have been the likely outcome.’

Ryanair said that the refusal of its ‘historic and unprecedented’ concessions package was ‘manifestly unjust.’