Thomas Cook and the Co-op unveiled plans today to merge their high street travel businesses. With more than 1,200 shops, the newly-formed company will be the UK's largest travel agent and second biggest in foreign exchange.
The tie-up will enable Thomas Cook to streamline costs in the face of a sluggish travel industry and expected period of weak consumer spending.
Savings of around £35m sterling a year from the merger are expected to be achieved through job losses, store closures and the combination of existing head offices into Thomas Cook's current Peterborough headquarters. .
Staff at Co-operative Travel, which started life as a day excursion business in 1905, are based at the head office in Burslem, Stoke-on-Trent. The company also operates call centres in Manchester and Barrow, in Cumbria.
The new company will have a combined workforce of around 9,000 staff. Co-operative Travel has a staff of 3,000.
Thomas Cook, which will own 70% of the new company, is struggling with a drop in demand for overseas holidays, as anxious cash-strapped people opt to stay at home. Last month, the group confirmed it was reviewing its total UK workforce of between 13,000 and 15,000 staff, as well as its supplier base and all divisions in its UK arm, in a bid to cut costs.
The deal is subject to regulatory approval, but the companies hope the tie-up will be completed in early December. Analysts viewed today's merger as a good move.
Under the merger, the two companies will have a combined 4.3 million customers, and each company will contribute their entire retail estates, comprising 803 and 401 shops respectively, together with foreign exchange and cruise operations.
