Thomas Cook set to acquire TCI

Thomas Cook set to acquire TCI
ENS ECONOMIC BUREAU

Mumbai, July 13: Thomas Cook (India), a leading financial and travel company, is set to acquire Travel Corporation of India (TCI), one of the largest tour operators in India. ``We're in talks with TCI for a possible acquisition,'' the company said in a statement.

``The takeover is part of the consolidation process, and will reposition Thomas Cook as the number one travel agency in the domestic market,'' a company official said. The takeover of TCI by Thomas Cook is the second major buyout in the domestic travel industry after Kuoni took over SOTC and Sita Travels recently.

According to chairman Thomas Cook Pradeep Madhavji, the company wants to expand itself both horizontally and vertically by going in for more acquisitions and strategic alliances. It will include both brick, mortar and click, and portal models.

Both the companies will continue to operate as two brandnames even after the takeover, and the synergy between them will boost Thomas Cook's bottomline. The management of TCI operations will continue to be in the hands of the Kalgara group. "We expect the combined profit of the companies will double from its present level of around Rs 50 crore," Thomas Cook MD Kakkar said.

Thomas Cook, which gets 60 per cent of its income from forex transaction, will introduce the same service in the 27 offices of TCI and, in turn, TCI will service some 40,000-50,000 inbound traffic of Thomas Cook. Thomas Cook, which has 51 branches, will have 78 branches at its disposal after the takeover.

Thomas Cook also plans to set up a branch network in Saarc countries soon. Its other expansions plans include allied activities like cruising, hotels, e-commerce, and those related to tourism. After the acquisition, Thomas Cook will strengthen its foothold in all three segments of the travel business -- outbound, inbound and corporate travel.

TCI director Adi Katgara said: "Mergers and acquisitions are strengthening organisations all over the world. In view of of the future of the travel industry, the complementary strengths of the combined company will leave the group well placed to meet any challenges."

Thomas Cook Holdings Ltd and State Bank of India hold 40 per cent and 15 per cent respectively in Thomas Cook, and the rest is held by the public. Thomas Cook operates through 51 offices in 15 cities. Its core businesses include leisure travel, corporate travel, foreign exchange & travellers cheques, global services, and the global credit card.

TCI owns 27 offices at major tourist destinations and cities in India, and employs 1,200 people. It has 12 offices in the US, Canada, South America, Europe, UK, Japan and Australia.