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China's Fosun expected to bid for UK travel firm
Last Updated: 2019-04-23 23:56 | China Daily Global
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Chinese conglomerate Fosun International is considering a bid for all or part of United Kingdom-based travel company Thomas Cook, according to reports.

Fosun is understood to be one of a number of potential bidders that have held preliminary talks with Thomas Cook, which is the UK's oldest travel company.

Discussions are in the early stages and any potential takeover would be months down the line, according to Sky News, which first reported the developments.

Sky News named New York City-headquartered investment company KKR and Swedish private equity firm EQT as two other interested parties.

Thomas Cook declined to comment when contacted by China Daily, and Fosun had not responded to requests at the time of publication.

Established in 1841, Thomas Cook is the world's longest-running tour operator. Initially founded as a railway service, the company now has 22,000 staff serving 19 million customers a year in 16 countries. The company runs its own airline and operates nearly 600 high-street travel stores around the UK.

Last year, the company suffered heavy losses, brought on by an increasingly competitive travel market and a summer heatwave that saw fewer Brits go abroad on holiday.

In November, Thomas Cook announced pre-tax losses of 163 million pounds ($211 million) for 2018, compared with profits of 9 million pounds the previous year.

Thomas Cook put its airline up for sale earlier this year when it also announced the closure of 21 UK stores and the loss of 300 jobs.

The company's chief executive, Peter Fankhauser, said 2018 had been a "disappointing year".

"The UK was particularly hard hit with very high levels of promotional activity coming on top of an already competitive market for holidays to Spain," Fankhauser said when he issued the profit warning in November.

Thomas Cook and Fosun have already partnered in China, where they established a joint venture in January. That deal involves building two hotels, including a Chinese branch of the British travel company's Casa Cook chain. The hotels will be constructed by Fosun and managed by Thomas Cook.

Fosun has made notable investments in the UK in recent years. It purchased Premier League soccer club Wolverhampton Wanderers for 45 million pounds in 2016. And, last year, Fosun affiliate Resolution Property bought four floors of the Royal Exchange building in the City of London for 45 million pounds.

Fosun is also focusing on building out its tourism portfolio. Its travel arm, Fosun Tourism, took control of major French holiday group Club Med in 2015. And last week, Fosun's venture capital branch, Fosun RZ Capital, led a $6.75 million Series A investment round in Splitty, an online hotel booking startup based in Israel.

"Fosun will definitely invest more in travel," Wilson Jin, chairman of Fosun RZ Capital, said last Monday when the investment was announced.

The largest-ever acquisition of a British travel company by a Chinese buyer happened in 2016, when Ctrip took control of Edinburgh-based flight booking company Skyscanner in a $1.7 billion deal.


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China's Fosun expected to bid for UK travel firm
Source:China Daily Global | 2019-04-23 23:56
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