The final chapter in the number one story of the year for the global tour operator industry—the divestiture by Zurich-based Kuoni of its tour operator businesses—is nearing completion with the just-announced selloff of Kuoni’s operations in India to Thomas Cook India. Two months ago, the Cologne-headquartered Rewe Group, which owns DER Touristik, acquired Kuoni UK together with Kuoni tour operations in Switzerland, Scandinavia and the Benelux region. (These actions follow the 2013 decision by Kuoni to sell off branded units, as well, in Italy, Spain, The Netherlands, Belgium and Russia.)
With the acquisition, Thomas Cook India is expanding its penetration in the travel business in the world’s second most populous country and the Number 9 overseas source market for the USA (it generated more than 960,000 USA visitors last year) by buying a 100 percent stake in one-time rival Kuoni group’s travel business in India and Hong Kong for 5.35 billion rupees ($84 million). Thomas Cook will take all the 1,800 employees of Kuoni’s travel business unit and run it as an “independent entity.” Already, Thomas Cook India is present in over 232 locations across India, Mauritius and Sri Lanka.
In an Aug. 7 notice to stock exchanges, Thomas Cook India said the deal would be financed through a mix of funds from earlier “equity infusion, internal accruals, debt funds (for Hong Kong) and or other permissible modes.” The expansion of Thomas Cook India is not exactly a surprise to those who have followed the travel trade in India in recent years. Fairfax Financial Holdings, the Toronto-based financial services holding company, is the controlling shareholder of the company, which had originally acquired 77 per cent in Thomas Cook India from its UK-based parent for $171 million in 2012. Prem Watsa, chairman and CEO of Fairfax Holdings, is the controlling shareholder of Thomas Cook India.
The year began with Kuoni’s announcement that, as part of a strategic review, it would focus on its core business as a service provider to the global travel industry and governments and exit the tour operating businesses in Hong Kong/China, India, Scandinavia, Finland, the Benelux and the UK.
Sören Hartmann, the chief executive of DER Touristik, has said that the full integration of the Kuoni units—it includes nearly 40 locations in the UK alone—will take two to three years.
