Planned Merger of Thomas Cook and Co-op Society Provisionally Approved
The Competition Commission of UK has released a provisional approval to the plan of Thomas Cook and the Co-Operative Group and Midlands Co-operative Society to merge their UK High Street retail travel businesses.
This deal will bind three of the largest companies in the United Kingdom. Thomas Cook at present has 780 stores while the Co-operative Society has 360 shops and Midland Co-operative Group with 100 outlets.
The merger will establish the biggest retail travel chain and the second largest foreign exchange operation in the UK high street exchange next to the Postal Center. However, the Competition Commission has come up with a decision that the alliance of the three retailers would not cause any significant decrease of customer competition when it comes to purchasing high street package holidays.
Thomas Cook is now getting attention as to how many shops it would possibly close after the merger which is anticipated to get full approval from the Competition in August 16.
Meanwhile, Thomas Cook publicized a strategic analysis of its business after its recent profits warning. However, the retailer emphasized that it will not decide to close shops until the decision of the Commission on the Co-op merger.
The deputy chairman of the commission, Laura Carstensen, stressed that the rise of the competition and the role of the Internet in assisting customers to book holidays were some of the factors that would cut the possibility that the merger would lead to increase in prices over time.
The Chief Executive of Thomas Cook Manny Fontenla-Novoa said that aside from the Co-operatives and Thomas Cook, their staff and customers will also find the announcement as great news. He added that this deal is a part of their plan to boost their UK business. Thomas Cook will have 70 percent of the shares while the Co-operative Society and the Midland Co-operative Group will have the remaining 30 percent.
The Competition Commission has encouraged concerned companies to air out their queries or objections that have to do with the planned merger. They are been given until the 11th of August to speak out.
Meanwhile, Thomas Cook on another announcement relayed its expectation that the deal will be fulfilled before this year ends. If this step is justified, the establishment of the biggest retail operation for travel will finally soar in the territories of Great Britain.
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