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Cook going for a hat-trick of buyouts

Thomas Cook India, whose ownership recently changed hands to Dubai Financial LLC from Thomas Cook AG, now is in aggressive mode.

Chairman Udayan Bose said the company is considering three overseas acquisitions, and India would be the hub for all future acquisitions.

He however refused to comment on the timeline, ticket size, or the war chest for the acquisition.

Thomas Cook India has over Rs 150 crores in reserves, and hence leveraging the balance sheet is not going to be a problem for the company.

Thomas Cook India is in travel (in-bound, out-bound, charter handling, cargo) and travel-related financial services (forex and insurance) business.

It is the largest in-bound charter handling company with a 20% market share, number two out-bound leisure travel company with a market share of 25%, and has a 20% share in organised business travel.

“We are in talks to acquire three companies, all overseas, which are in the same line of business we are in,” Bose said, while ruling out any entry into the hotels or airline sector. Dubai Financial and its parent Dubai Investment Group have exposure to hospitality (Al Burz, Emirates Tower, Carlton Tower) and airlines (Emirates).

In January this year, Dubai Financial acquired 60% of Thomas Cook AG stake and subsequently made the mandatory 20% open offer, which resulted in its stake going up to 68%. State Bank of India and Unit Trust of India collectively hold about 10.5% in the company.

In spite of Dubai Financial buyout, Thomas Cook India can retain the name and logo of its German parent, in exchange of royalty, for a period of seven years.

The change in ownership also gives Thomas Cook India to take non-Thomas Cook AG in-bound traveller business, something it was restricted from doing earlier.

Under the sale agreement, Thomas Cook India can operate in India, Pakistan, Sri Lanka, Mauritius, Seychelles, Bangladesh, and Nepal.

Of these it currently has presence in  India, Sri Lanka, and Mauritius. Bose said although the company can enter these geographies, the feasibility hasn’t been studied yet. Last year, India saw 3.5 million in-bound tourists and 5 million out-bound tourists.

According to World Travel and Tourism Council, tourism growth in India is expected to grow by 10% annually from 2004-2014.


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