Thomas Cook-MyTravel takeover cleared by EC

The European Commission has approved the acquisition of MyTravel by Thomas Cook AG owner KarsdadtQuelle.

The Commision said it had concluded that the deal “would not significantly impede effective competition” in the European Economic Area or any substantial part of it.

The proposed transaction “would not harm consumers in the UK and Ireland who would continue to have access to package tour at competitive prices”.

The Commission said its decision is “without prejudice” to its assessment of the TUI/First Choice merger which it said it will rule on no later than May 16.

The merger remains subject to a number of conditions, which, if satisfied, will enable completion of the merger on June 19, the two companies said.

Thomas Cook AG group CEO Manny Fontenla-Novoa said: “This is a very important development for us in the process of merging these two businesses

and we are very pleased that the Commission has decided to clear the transaction.

“We are now one step closer to being able to deliver the substantial benefits of this merger to all our staff, customers, business partners and shareholders.”

MyTravel chief executive Peter McHugh said: “I am delighted we have received this clearance. This is a significant milestone on the way to completing the merger.

“The merger is clearly in the best interests of our shareholders and the European Commission Phase I clearance will allow us to accelerate the merger process.”

The Commission said its investigation into the Thomas Cook-MyTravel deal found that given the combined market shares of the parties on the markets for the supply of short haul and long haul packages in the UK and Ireland, “the proposed concentration would not enable the parties to independently raise prices”.

The combined group would continue to experience competition from TUI and First Choice as well as numerous small package holiday operatiors, the Commission said.

It added that the deal would not “significantly increase the risk of co-ordination of prices or capacity between the remaining major tour operators in the UK and Ireland”.

The Commission took into account increased use of the internet and of online distribution which have opened up a direct route to market for smaller suppliers and also allow travel agents and consumers to combine different travel components together.

A statement said: “The Commission also concluded that the proposed transaction would not adversely affect access to airlines and accommodation capacity for other tour oeprators givne that the combined market position of the parties in these wholesale markets would not be large enough to seriously affect the ability of smaller tour operators to compete.

“In relation to travel agencies, the parties account for a relatively small number of retail outlets whereas a large majority of travel agents would remain independent from the parties. Moreover, the developments in online ditribution have in general decreased the dependency of independent tour operators on ‘high street’ distribution.”

by Phil Davies