Leisure travel operator TUI Travel Plc (TT.L) confirmed Thursday that it is in early discussions with German airline company Deutsche Lufthansa AG (DLAKF.PK, DLAKY.PK) and British leisure travel group Thomas Cook Group Plc (TCG.L) over a three-way combination of their respective low-cost airline units, TUIfly Germany, Germanwings, and Condor in Germany.
However, no commercial terms have been agreed, the West Sussex, U.K.-based TUI Travel noted. Also, there is no certainty that any transaction would emerge, the company added.
On January 29 this year, TUI had signed a Memorandum of Understanding with Lufthansa and Albrecht Knauf Industriebeteiligung GmbH. The MOU allowed the parties to continue with the merger plans under a joint and independent holding company.
On August 14, TUI Travel had stated that it plans to merge Lufthansa's Eurowings Luftverkehrs and Germanwings GmbH operations with its Hapag-Lloyd Flug GmbH and Hapag-Lloyd Express GmbH operations under a joint and independent holding company. For this, TUI had stated it "continues to hold substantive discussions with Lufthansa."
TUI Travel is a relatively new company, having formed on September 3, 2007 through the merger of the tourism businesses of TUI AG (TUIFF.PK) with First Choice Holidays Plc (FCD.L), following the acquisition of First Choice by TUI AG.
On the other hand, Thomas Cook was formed on June 19, 2007 by merging Thomas Cook AG and MyTravel Group Plc. The new company is one of the world's leading leisure travel groups, having sales of around GBP 9 billion drawn from 19 million customers. The company boasts of a fleet of 97 aircraft and a network of over 3,000 owned or franchised travel stores and a number of hotels and resort properties.
TT.L is currently trading on the LSE at 201.75 pence, down 2.25 pence, or 1.10%, with a volume of 1.14 million shares.
Meanwhile, TCG.L is trading up on LSE by 0.50, or 0.23%, at 215.50 pence, on a volume of 1.59 million shares.
DLAKY.PK closed Wednesday's last trade at $21.30, while DLAKF.PK last traded on August 22 to close at $21.40.
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