|
Travel titans book merger
|
 |
October 5, 1998: 7:17 p.m. ET
Carlson Cos.' UK leisure travel businesses team up with Thomas Cook
|
NEW YORK (CNNfn) - Mapping an itinerary with millions of post-millenial globetrotters in mind, two titans of the leisure travel industry, Thomas Cook and Carlson Cos., announced Monday their intention to merge Cook's worldwide leisure and financial services business with Carlson's British-based vacation business.
Because both of the merging partners are private, financial terms of the agreement were not divulged.
But the deal is estimated to be worth slightly more than $1 billion, sources familiar with the merger told CNNfn.
The deal, subject to regulatory approval and due diligence, would instantly spawn one of the largest vertically integrated travel groups in the United Kingdom -- not to mention the world -- with 2.5 million package tours a year, a fleet of 32 aircraft and a nationwide network of 800 travel shops nationwide.
The combined company will operate under the name Thomas Cook but will be co-owned by U.S.-based Carlson Cos. and Thomas Cook's parent company, Westdeutsche Landesbank, with the latter owning a majority stake.
The new entity will generate annual sales of about $42.5 billion.
Beyond the mega-numbers, though, the partnership also aims to fuse the travel and hospitality expertise of Carlson with the financial services acumen of Thomas Cook.
Carlson's world-beating credentials include ownership of the Radisson and Regent International hotels and global restaurant chain TGI Friday's.
Thomas Cook is the world's largest issuer of travelers cheques outside the United States. It also operates the largest network of overseas retail currency exchange bureaus, many located in airports throughout the world.
Attempt to "align" with global traveler
Marilyn Carlson Nelson, the president and chief executive officer of Carlson Cos., based in Minneapolis, Minn., described the blockbuster merger in an interview with CNNfn as "a strategic decision to align ourselves with the global traveler."
Those travelers, the partners in the merger presume, will demand an ever higher standard of travel services, delivered seamlessly and smoothly no matter where their wanderlust leads them.
In this respect, the logic driving the merger mirrors that being invoked in other industries -- whether financial or telecommunications -- where one-stop shopping and uniformity of service are invoked as the catch phrases of the future.
Despite the global economic slowdown, Carlson said, leisure travel and tourism contributed $4.4 trillion to global gross domestic product this year. Since travel tends to grow at a slightly faster clip than worldwide GDP, the industry also contracts more in times of global downturn.
Citing industry projections, Carlson said the worldwide market for global leisure services is expected to mushroom to about $10 trillion by 2010.
At present, the Carlson Leisure Group, operating under Carlson World Choice, ranks fourth or fifth in the UK leisure travel market. By teaming up with Cook, Carlson said, her company would have a chance of vaulting to the head of the pack.
"We realized that if we wanted to be one, or two or three that we needed to come together with a very strong brand," she said. "It was clearly part of our strategy -- our global strategy -- to partner in order to build a global leisure services company."
Businesses from Canada to India
Westdeutsche LB will add to the partnership Thomas Cook's worldwide travel, financial and global services businesses, scattered from Canada to India to Australia. In the UK alone, Cook's network includes 385 leisure travel agencies; Flying Colours, its fleet of 14 leisure aircraft and its tour businesses -- Sunworld, Flying Colours and Thomas Cook Holidays.
Carlson, for its part, will pitch in 412 Carlson Worldchoice travel agencies, an 18-plane Caledonian and Pacific Airways charter aircraft fleet, and tour operations including Inspirations, Skiers World brands, Air Savers flight consolidators and its seat-only sales company, Flights by Inspirations.
Carlson would also contribute its special relationship with the 650 independently owned travel shops of ARTAC - the Association of Retail Travel Agents Consortia. ARTAC currently is in a co-branding agreement with Carlson, under which it uses the Worldchoice brand.
The new travel-and-leisure behemoth will employ more than 20,000 people and run a global network of more than 3,500 representative locations in more than 100 countries.
Carlson, one of America's oldest travel agency networks, founded in 1888, entered the British travel market in 1990 through its acquisition of Scotland-based AT Mays Travel. Last year, it bought the Inspirations group.
Thomas Cook, created in 1841, has focused over the past two years on expanding its travel and financial services amid a broader consolidation of the UK travel market.
Carlson, which also operates business travel agencies across the world through its Carlson Wagonlit Travel brand, co-owned with Accor of Paris, said those businesses would not be affected by Monday's announcement.
|
|
|
|
|
 |
|
