Thomas Cook and Co-op in holiday business merger

Thomas Cook Group and The Co-operative Group have agreed a merger of their high street travel and foreign exchange businesses.

The deal will create the UK’s biggest high street travel operation with 1,200 shops.

It is estimated that the pair can save a total of £35m in costs through the agreement.

Under the merger, Thomas Cook and The Co-operative Travel will have a combined base of 4.3m customers.

The pair estimate that its retail businesses will deliver operating profit of £12.4m and £0.1m for the twelve months ending 30 September 2010 and 1 January 2011.

Thomas Cook will have 70 per cent of the shares in the new company and the Co-operative Group will have a 30 per cent. No cash will change hands.

Thomas Cook Group CEO, Manny Fontenla-Novoa will serve as Chairman, Ian Derbyshire will serve as chief executive and Paul Hemingway as finance director.

Fontenla-Novoa said: "This transaction represents a significant consolidation opportunity in the UK travel market and, by joining forces, we will create the country's largest high street travel network and reach a far wider customer base.

"By consolidating the high street in tandem with delivering on our existing e-commerce targets, we are realising our strategic aim to increase in-house distribution and strengthening our proposition to consumers."