Thomas Cook and Co-op merge travel agents

8th Oct 2010 07:02

Holiday company Thomas Cook and the Co-operative Group are merging their high street travel agents and foreign exchange businesses.Today's move creates Britain's largest high street travel network with over 1,200 shops - 803 Thomas Cook and 401 Co-op - and result in savings of more than £35m a year.Thomas Cook will own 70% of the new company, which will rank as the second largest provider of retail foreign exchange, and the Co-op 30%. The deal doesn't involve any cash.Manny Fontenla-Novoa, Cook's current CEO, will be chairman, Ian Derbyshire, boss of Cook's UK business, is chief executive, and Paul Hemingway, chief number cruncher at the Co-op's travel and specialist retail businesses, will head the new firm's finance unit.There will obviously be concerns about jobs as the pair plan to combine their headquarters and back-office functions, consolidate IT systems, close shops and streamline supplier contracts. If the tie-up completes in December, the savings and a further £10m in additional "upstream synergies" should be fully achieved in the financial year to 30 September 2012.The duo's retail businesses are expected to deliver operating profit of £12.4m and £0.1m for the 12 months ended 30 September 2010 and 1 January 2011 respectively."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," said Fontenla-Novoa.