Thomas Cook to buy back stake in Indian arm

Thomas Cook UK today said it would spend up to 249 million euros ($384 million) to buy back controlling stake in Thomas Cook India (TCIL) and its businesses in Middle East from Dubai Financial Group (DFG). Thomas Cook had sold its stake in TCIL to DFG in 2006.

Thomas Cook said it was buying 74.9% stake in TCIL, along with 100% of Thomas Cook branded businesses in Egypt, as well as licences for the Thomas Cook brand in 15 Middle East countries from DFG for a total cash consideration of between 208-249 million euros subject to outcome of the open offer.

"This acquisition fully supports the Thomas Cook strategy to expand into emerging markets that represent a great growth potential as well as to strengthen its financial services business. Through acquiring a controlling stake in TCIL, the largest foreign exchange and second largest travel company in India, Thomas Cook will become a leader in one of the fastest growing travel markets," Thomas Cook said in a release.

Manny Fontenta-Novoa, chief executive, Thomas Cook Group, said: "I am delighted we have secured such a significant acquisition in this fast growing market. Thomas Cook has a long and enviable history in India dating back to the 1880s, and the brand name has become one of the best known in the country. Adding what is one of India's largest travel and financial services businesses to our portfolio will allow us to take full advantage of the growth prospects that this market offers and fully supports our strategy of entering the fast developing emerging markets and expanding our financial services businesses."

TCIL has about 2,500 employees with a total retail network of about 180 outlets across 40 cities. TCIL has acquired LKP Forex, its largest competitor in the foreign exchange business, and Travel Corporation of India - an inbound operator. TCIL is now the largest foreign exchange operator, with approximately 50% market share, and the second largest travel group.