Travel firm Thomas Cook said on Friday it was spending up to 249 million euros (Dh1.41 billion) on acquisitions in India and the Middle East as part of a drive to expand in fast-growing emerging markets.
Europe's second-biggest travel firm, created last year from the tie-up of German group Arcandor's travel unit and Britain's MyTravel, said it was also on the lookout for more deals, particularly in Russia and China.
"We've identified India, Russia and China, probably in that order," Chief Executive Manny Fontenla-Novoa told reporters on a conference call.
Thomas Cook said it was buying up to 74.9 per cent of Thomas Cook India Limited (TCIL), India's second-biggest travel group.
It will also buy Thomas Cook branded businesses in Egypt and licenses for the Thomas Cook brand in 15 Middle East countries.
"We want to establish (ourselves) in the emerging markets because they are the growing market," Fontenla-Novoa said. "The exciting thing about India is that the natural growth there is 15 per cent ... and we have a good management team there."
All the businesses are being bought from Dubai Financial Group LLC, and Thomas Cook will pay between 208 million euros and 249 million euros (Dh1.18 billion and Dh1.41 billion) cash, depending on the size of the stake it takes in TCIL.
Thomas Cook said it would buy at least 61.8 per cent of TCIL, including 54.9 per cent in a private transaction at a price of 107 Indian rupees a share. It will tender for up to a further 20 per cent in an open offer at the same price.
At 0930 GMT, TCIL shares closed up 5 per cent at 88.5 rupees. Thomas Cook shares were down 2.7 per cent at 289 pence in a weak London market, valuing the business at about 3 billion pounds ($6 billion; Dh22.02 billion).
Landsbanki analysts said in a research note that Thomas Cook was paying a full price for TCIL.
"This is very expensive for a travel business, which can partly be justified on the growth potential. Whilst it meets the group's acquisition criteria, we have always thought these criteria were weak," they wrote, keeping a "buy" rating on Thomas Cook's stock.
Next stop, Russia
Fontenla-Novoa said the deals meant the company would own all Thomas Cook-branded businesses around the world.
With reference to Russia, he said Thomas Cook was interested in tour and retail operators that service healthy demand there for sun and beach holidays, but did not name specific targets.
"The Russian market is very different to the Indian market – it's much more about beach and sun destinations ... We will look at business with interests in those markets," he said. (Reuters)
Follow Emirates 24|7 on Google News.