German-owned Thomas Cook is to buy British package holiday rival MyTravel, creating a travel giant worth about £2.8 billion (€4.2 billion).
The new company is to be called Thomas Cook Group and will take around 19 million people a year on holiday. In Ireland, Sunworld, Panorama, Airtours and Direct will all come under the ownership of the new merged company.
The deal comes after UK-based MyTravel returned to profit for the first time since 2001 in December.
Thomas Cook, which is owned by stores group KarstadtQuelle, will hold 52%, with the other stake controlled by MyTravel's shareholders.
MyTravel CEO Peter McHugh said the deal would create a company with annual revenue of around £8 billion (€12 billion) and close the gap on Europe's biggest travel operator TUI AG. The deal is due to be completed by June.
The new firm, to be headquartered in London and listed on the London stock exchange, would be worth around £2.8 billion (€4.2 billion) following a jump in MyTravel shares today.
As a result of the merger, the companies said they had ditched plans to take over the mainstream package holiday business of British competitor First Choice.
MyTravel shares closed almost 29% higher in London.
